A-C Relationship y Pre-formation: dty of confidentiality may arise pre-formation(#12 preable) Formation: no particular formalities required; conduct of parties

sufficient; the y existence of the relationship turns on the reasonable expectations of the C in light of all circumstances y Defenses to inadvertent representation : (1) Another person was lawyers sole C; (2) lawyers allegedly bad action occurred in some other context (e.g., business partner ship), not A/C rship; (3) didnt represent anyone mere scrivener (weak!); (4) settled that representation of corp, gp, lp rep of individuals y Duty to inform person that A does not represent: duty exists if: (1) A knows or rsnbly should know the person believes A is her A, or (2) As conduct would have led rsbl person to believe A represents her y Engagement letter should specify: (1) identity of C; (2) scope of engagement; (3) allocation of work in firm; (4) fee to be charged; (5) rights of C; (6) rights of A; Catchall concept ambiguities construed against drafter (failure to specify net/gross = net). Arbitration Agmt - should Inform Client Adv./Disadv; Cant insulate lawyer y from liability; terms cant abrogate TX rules; Should conspicuous, and prominently displayed; Use severability clause to avoid entire agreement being voidable under Sanes if court finds the Arb pro vision contrary to TX rules; unenforceable for fraud: substantive or procedural unconscionability; unilateral ability to invoke w/o consideration; expenses cant fall only on client Declining representation: must make it very clear; some states have held A liable y for failing to warn declined Cs of upcoming deadlines (e.g., SOL); also A may have duty of confidentiality if C told A anything confidential during consultation y Authority of A R1.02: A is a special agent of C; authority doesnt extend to substantial rights; A is not free to: settle or dismiss case w/o permission, decide who to sue and who not to sue, decide on claims and defenses to raise, plead guilty, request jury trial, whether to appeal etc. w/o C permission; but litigation tactics: A has wide discretion incl (witness selection, documents in evidence, objections, postponements) y Fee AgreementsR1.04: (1) No agreements where A chooses basis for fees after the fact (unconscionable. under R 1.04(a)); (2) contingent fees must be in writing or void, and must specify gross or net, or A gets net; (3) take care in renegotiating fees once representation begins: no longer arms -length neg., but now A owes fid. duty to C--fee forfeiture is a remedy upon showing of breach of fid. duty, even if no damages (Burrow v. Arce). o Any agreement that seeks to alter the framework of rights and responsibilities violates Tex. Rules is voidable at Cs option! (Sanes v. Clark) o Beware PIK agreements risks: unconscionable fee ( note: Unc Fee diff b/w what you paid for and what you received is element of UncFee); o Equity deals require: deal fair/reasonable; terms fully disclosed and understood; reasonable access to outside counsel, Cs written consent o Other danger fees: nonrefundable retainer, security interest in home stead, heads I win/tails u loose agreements, changes to fee structure during term of engagement, o $ dispute pay undisputed, escrow disputed $ with court, seek declaratory judgment order from court y Termination of RepresentationR1.15: (1) C can discharge A at any time (NOTE: if w/o cause, A still entitled to full fee (Mandell & Wright v. Thomas) but this case is old and may not be enforced; if for cause, A entitled to quantum meruit at most); (2) discharge by mutual agrmt (A entitled to quantum meruit: NY rulepay immediately; Cal. rule-pay upon recovery); (3) withdrawal by A R. 1.15 governs (if w/o cause no fees (Auguston); if w/ cause, may still get fees) y Other Issues(3) Malpractice (breach of std of care adequate representation) (avoid categorical opinions, always qualify) y Elements: P must prove that (1) the attorney owed the plaintiff a duty, (2) the duty was breached, (3) the breach proximately caused the Ps injuries, and (4) the plaintiff incurred damages. (Peeler v. Hughes & Luce, 909 S.W.2d 494, 496 (Tex. 1995)). (Xpert uslly needed to estblsh (2) & (3) y Situations w/liability for Neg (MP): (1) erroneous opin/advice;(2) failing to give advice when req.;(3)disobeying lawful instruct; (4)taking action when not instructed;(5)delaying or failing to handle matters when entrusted to;(6) failure to use ordinary care in litigation y Privity:only C has standing to bring M. claim; in case of C death, heirs cannot sue (Barcelo v. Elliott), but estate can (Belt v. Oppenheimer et al. based on theory that deceased suffered dmgs before death in attnys fees paid for bad service ); subrogating insurer can sue (American Centennial) Vicarious Liability: Gen. Rule: As are responsible for neg. acts of EEs that fall y w/ in scope of their employment. A not liable for unauthorized acts (Moser v. Davis) Stnd of Care: duty to discharge obligations w/degree of care exercised by y reasonably prudent lawyer; 2 aspects(1)competence, & (2) diligence o Competence: expected to possess degree of skill and knowledge that lawyer of ordinary skill and knowledge of the law would possess o Diligence: must act with diligence the situation demands  Most obvious violation: missing SOL

y y

Locality rule: A only held to stnd of care observed by attnys in community where practicing; this must be established by Xpert tstmny of one familiar w/ locale Local counsel: where LC limited and subservient role LC only liable for o acts or omissions within their own authority o Specific Situation of A: jury should consider the information the attny had (or should have had) at the time of the alleged negligence (Cosgrove v. Grimes) o Experts/Specialists: held the stnd of care of reasonably prudent attny that is expert or specialist in that field o Expert witness: Expert witness required EXCEPT: (1) no disputed factual issues (2) egregious M (res ipsa loquitur); (3) failure to follow Cs clear instructions  Must be based on more than prior exp., must include reasoned demonstrable basis o Vicarious Liability: not liable for intentional/malicious acts: elements (1) w/in scope of authority of servant, (2) furtherance of employers bus, (3) for accomplishment of object which servant is employed Causation: cause in fact & forseeability; o Prove case w/i case(win original to win MP) for MP arising out of litigation, P must show (1) would have won, (2) would have been able to collect some jdgmt (including that D was solvent)  For D, D must show (1) had a meritorious defense, (2) would not have had to pay some or all of jdgmt o Appellate std: purely a matter of law whether properly conducted appeal would have been more successful o Criminal: convicted D not allowed to assert M unless 1st establishing actual innocence through direct appeal or collateral proceeding, regardless of how egregious As neg (Peller v. Hughes & Luce) o Causation among successive firms: courts reluctant to relieve predecessor attny, who plaid substantial part in loss, of liability unless successor attny could have salvaged had ample opportunity to consider what remedial measures to employ  Elements 2nd attny superseding cause of harm: (1) occurred after A1s neg; (2) was not a consequence of A1s neg; (3) caused a result that otherwise would not otherwise have followed from the original neg; AND (4) was not reasonably foreseeable MP Damages: o Litigation--(1) for P: what amount would have been awarded if case properly handled; (2) for D: had meritorious defense to some or all damages awarded o In Connection w/ Settlement: must who A caused C to accept too low/too high of settlement and difference in value (Cosgrove v. Grimes) o Mental Anguish: allowed for malpractice on same basis as other torts (Cosgrove v. Grimes (Tex. 1989)); not recoverable if caused solely by economic loss; must show: (1)D acted intentionally or recklessly, (2) Ds conduct extreme & outrageous, (3) caused P emotional distress, (3) emotional distress was severe. o Exemplary Damages: Two ways: (1) P would have won ex. dmgs in underlying matter if not for M, or (2) show M was committed w/ malice (specific intent to harm; extreme risk; or conscious indiff. to rights, safety, or welfare of others) or actual fraud by clear and convincing evidence o Attnys Fees: not awarded to prevailing P (Heath v. Herron); can be considered if P entitled to exemplary dmgs (InterFirst Bank Dallas)  Fees from underlying action: majority rule: do not reduce amt recovered by amt that would have been paid to D in As fees Situations informal advice, comingled representations entity vs. individual client, fiduciary client vs. beneficiaries of fido, failure to clarify termination Other MP action not assignable except subrogation (insurance); o Facts; existence of facts is jury q, a s is nature and amount of damages that resulted from conduct, q of whether facts constitute MP is legal q for court are jury q; On SOL/discovery cases, P must argue issue couldnt be discovered with due diligence or SOL isnt tolled until discovery and C loses Anti-fracturing rule (Troutsdale): If Cs complaint is that the attorney did not exercise that degree of care, skill, or diligence as attorneys of ordinary skill and knowledge commonly possess, then that complaint should be pursued as a negligence claim, rather than some other claim. (Deutsch, 97 S.W.3d at 189 ) If, however, Cs complaint is more appropriately classified as another claim, for example, fraud, DTPA, breach of fiduciary duty, or breach of contract, then the client can assert a claim other than negligence. Id o Troutstdale cont: Sep. cause of action for BoFD exists if the allegations allege self-dealing, deception, or misrepresentations by A. (Goffney, 56 S.W.3d at 194) We have never held that self-dealing, deception, and misrepresentation must all be present in order for BoFD claim to stand; rather, we stated that the allegations in support of a breach of fiduciary duty claim must simply go beyond the mere negligence allegations in a malpractice action. (McMahan, 108 S.W.3d at 495) o

Breach of Fiduciary Duty- (breach of std of conduct improper benefit from C Important: C not required to show damages in fee forfeiture case, just breach (Burrows v. Arce P does not have to show As conduct adversely affected y General duty: 3 components: (1) loyalty, (2) confidentiality, (3) candor o Loyalty: A must have no conflicting professional or personal obligations (undivided loyalty) o Confidentiality: (1) no unauthorized disclosures of conf. info; (2) no unauthorized hostile use of conf. info.; (3) no benefit from conf. info. w/o full disclosure and consent o Candor: must disclose all info to C that C would believe to be material (this includes any pre-existing loyalties of As C would reasonably want y to know about) (proactive duty to disclose all info C could believe is material to representation)  Ex: Preexisting loyalties to opposing or jointly represented parties the C could reasonably find raises doubts A ability or y willingness to meet obligations with competence, liligence and loyalty; info clients need to make informed decision concerning matter entrusted to A A should make sure that C are aware of any feasible options available; includes conduct by A or As firm that is disloyal or has impaired Cs interests y Duty to Non-Cs: Declined Cs: duty of confidentiality; Former Cs: duty of confidentiality; o Aiding and abetting breach of fid. duty: knowing substantial assistance to a C in that Cs breach of a fid. duty to a 3d party o Conversation for past crimes are privileged; (2) fiduciary trap A negotiating against C during engagement drafting when A is Cs y representative via some service or advice; y Elements: (1) existence of fiduciary relationship (i.e., A/C relationship); (2) breach of duties accompanying that relationship; (3) causation*; (4) damages** y Examples of BoFD that merit fee forfeiture: (1) disloyalty directed at client (converting clients settlement), (2) sacrificing clients legit interest in order to further interest of another; (3) altering allocation of authority b/w A&C (Sanes v. Clark);(4) TX rule 7.03(d) A used prohibited means of acq. Cs representation (barratry) y BoFD examples: most often = failure to disclose CoI, failure to deliver funds belonging to the client, placing personal interests over Cs interests, improper use of client confidences, taking advantage of Cs trust, engaging in self-dealing, and making misrepresentations; unconscionable fee y Damages for BoFD: special damages: (1) direct damages;(2) fee forfeiture;(3) punitive damages if shown to be intentional BofFD; Other: (4) constructive trust (title of wrongfully acquired property reverts to fiduciary, as well as any income generated while in As possession) o * if breach was criminal, fraudulent, or intentional, P may recover all damages suffered w/o showing of causation o **damages may not have to be shown fee forfeiture available w/o showing damages for clear & serious breach (Burrow v. Arce) o ** punitive damages available if breach is shown to be intentional or fraudulently (intentional is presumed where fid. stood to gain personally from breach) o ** constructive trust also available as equitable remedy where A acquired title or control over Cs property (C strips property from A, or any assets acquired by use/sale of that property) y Fee Forfeiture under Burrow v. Arce): P may obtain fee forfeiture as remedy for B. of F.D. w/o showing damages.Breach Must Be Clear And Serious. o Clear: if reasonable lawyer, knowing relevant facts and law . . . would have know conduct was wrongful. o Serious- amount forfeited linked to seriousness: Six factors: (1) gravity and timing of violation; (2) willfulness; (3) effect on value of As work for C; (4) any other threatened or actual harm to C; (5) adequacy of other remedies; (6) public interest in maintaining integrity of A/C relationship. o Partial/Total: depending on seriousness of breach, court can decide whether total or only partial fee forfeiture is in order o Pleading: P must specifically plead the equitable remedy of fee forfeiture (Lee v. Lee (Tex. App.Houston [14th])) Other Causes of Action (usually MP and BofFD are more advantageous due to breadth but common law and statutory actions may be beneficial b/c longer SOL or ability to recover attny fees) y Causes of Action Available only to Cs y o Violation of the Texas Rules - Texas Rules are not intended to confer a separate cause of action, nor does their violation create a presumption that a lawyer has breached a duty to the C. The Rules are purely for disciplinary purposes. o Breach of K non-performance of contractual duty when performance is due  Normal K principles apply. Be careful to make sure you really have a K claim though.  Also, express warranties can be made, and are enforceable.

Third party beneficiary theory for beneficiaries of a will Tex. Supreme Court has rejected TPB theory in this case. o Failure to follow Cs lawful instructions  Liability for failure to follow a lawful instruction stems from agency law.  Elements: (1) lawful instruction, (2) lawyer aware of it, (3) lawyer did not follow, (4) damages, (5) causation.  If failure is merely negligent (and not willful), this may be a malpractice claim, rather than a distinct failure to follow. y Causes of Action Available to Cs and Non-Cs Violation of Texas Rules as basis for refusing to enforce agreement o Rules are often used as defense(s) by C if sued by A for failure t o pay fees. Courts frequently refuse to enforce fee agreements in violation of the rules. DTPA o Has been applied to As. New exemption bars application of DTPA for rendering of professional services, the essence of which is the providing of advice, judgment, opinion, or similar professional skill, does apply forexpress misrepresentations, unconscionable action , or breach of express warranty that cannot be characterized as advice, judgment, or opinion; and failure to disclose. o Latham v. Castillo DTPA can be used for express misrepresentations, but not for negligent failure of A to act, TXSC allowed recovery for mental anguish without proving economic loss or case w/in case in medmal case where A missed SOL Negligent misrepresentation (not a known falsehood, just no reasonable belief it is true) o Elements: A liable only if he (1) acts in the course of his business or employment, or in any transaction in which he has a pecuniary interest, (2) transfers false information (3) to a known party, (4) for a known purpose, (5) with awareness of the non-C, and (6) intent that the non-C rely on the information, (7) reliance, (8) causation, and (9) damages. (McCamish, Martin (Tex. 1999)) o Lower courts have limited the application of this rule. See, e.g., BCY Water Supply Corp. v. Res. Invest. Inc. (Tex. App.Tyler 2005) (holding that the misrepresentation must be of existing fact, and not regarding something that will be done in the future). Fraud and Constructive Fraud o Fraud: Elements: (1) a material misrepresentation, (2) made with knowledge of falsity or recklessness as to its truth, (3) with intent that it be relied on, (4) actual reliance, (5) to detriment/damages. (intent is fact Q) o Constructive Fraud: (1) breach of some legal duty, which (2) the law deems fraudulent because of its tendency to deceive, violate confidence, and injure public interest. (applies only to people A owes obligations of fiduciary) o Damages: compensatory under either theory; exemplary and mental anguish for actual fraud o Bradt and Taco Bell: Bradt v. West (Tex. App.Houston [1st] 1994), not a fraud case,  held attny does not have right of recovery . . . against another attny arising from conduct . . . as part of the discharge of his duties in representing a party in [litigation].)  Taco Bell Corp. v. Cracken (N.D. Tex. 1996) applied Bradt in fraud case where alleged fraud was committed as party of attnys discharge of duties in litigation, and said fraud NOT actionable.  Many cases at Ct. App. Level have applied Bradt and Taco Bell to block fraud cases arising out of litigation. o Better view: Likover v. Sunflower Terrace II, Ltd. (Tex. App.Houston [1st] 1985) (holding attny could be liable for any fraudulent act that injures a third person, even if arising out of litigation); only a few Ct. Apps. have applied Likover, but have instead applied Bradt (too broadly). o Extrinsic v. Intrinsic fraud: establishes post trial remedies  Extrinsic allows judgment to be set aside if Lawyer lies about collateral matter (fails to follow through on concession he agree to  Intrinsic must be addressed in underlying action no set aside award  Civil Conspiracy o Elements: (1) two or more persons, (2) an object to be accomplished, (3) a meeting of the minds on a course of action, (4) one or more unlawful overt acts, and (5) damages proximately caused. (act is unlawful if violates criminal or civil law) o Parties must specifically intend harm which results from the conduct. o Recovery not based on conspiracy itself, but on the underlying tort. Conspiracy claim merely expands who you can sue (all who conspired). y Causes of Action Available only to Non-Cs o Aiding and abetting Bof FD

Elements: (1) fid relation b/w As C and3rd person; (2) As awareness of relationship; (3)Cs Bof FD; (4) As knowledge of breach; (5) As rendering of assistance;(6) damages to 3 rd person Abuse of Process  Elements: (1) an illegal, improper, or perverted use of process that was neither warranted nor authorized by the process; (2) an ulterior motive or purpose in making the use of process; and (3) special damages / causation.  Special damages must show special damages those other thannecessarily incident to being sued. Strong evidence of special damages includes interference w/ person or property as a result of suit (seizure, wrongful issuance of injunction exceeds expense, annoyance, humiliation, loss of credit rating, temporary loss of inc or other byproducts of suit  See, e.g., Mendoza v. Fleming (Tex. App.Corpus Ch. (2001)) Attny of creditor of candidate for judicial office garnished candidates campaign acct to satisfy debt. Candidate lost election. Later shown that garnishment was improper, and attny found liable for improper use of process. Malicious Prosecution  Elements: (1) institution or continuation of a civil or criminal proceeding against plaintiff; (2) done by or at insistence of defendant; (3) malice (i.e., ill will, evil motive, gross indifference, or reckless disregard for rights of others) in the commencement; (4) lack of probable cause; (5) terminating in plaintiffs favor; and (6) special damages (see above for special damages).  Fuqua v. Graber (Tex. App.Corpus Christi 2005) D had previously sued P, which led to criminal indictment of P, all causes later terminating in Ps favor. P sued for malicious prosecution in the civil matter, alleging as special damages attny fees incurred in the criminal matter. Corpus court upheld. Currently under review by Tex. Sup. Ct. Defamation  Elements: (1) the defendant published a statement; (2) the statement was defamatory concerning the plaintiff; (3) D acted w/ actual malice (knowledge that statement is false or serious doubts about falsity) if P was public official or public figure, or negligence if P was private individual, w/ respect to truth of statement.  Truth as a defense: In public figure case P has burden of proving falsity. In private figure case truth is a defense; not clear if pure defense (D must only raise, P must then prove falsity) or affirmative defense (D must raise and prove statement was true).  Absolute privilege: In Texas, there is an absolute privilege against suit for oral or written statements made in connection w/ judicial proceedings! y in connection w/ includes statements made in contemplation of judicial proceeding (before it is initiated) so long as related to proceeding and in furtherance of attnys representation of C. y Applies to IIED claims as well.  Unclear: Tex. courts are split over whether later publication of court documents containing defamatory statements are protected by the privilege. y If provided by attny, may turn on whether can be considered in furtherance of attnys representation. IIED / NIED  NIED no such tort in Texas (Boyles v. Kerr (Tex. 1993))  IIED intentional or reckless infliction of emotional distress is recognized in Texas (Twyman v. Twyman (Tex. 1993)) y Elements: (1) D acted intentionally or recklessly; (2) conduct was extreme or outrageous (so extreme as to go beyond all bounds of decency . . . atrocious . . . utterly intolerable . . . .); (3) actions of D cause P emotional distress; and (4) emotional distress was severe. y Long shot: Gap filler tort in Tx, available in rare instances where D inflicts sever emotional distress in manner so unusual some other statutory or common law remedy is unavailable (e.g., defamation). (Hoffman La Roche) Tortious Interference  Interference w/ existing K (1) existence of K subject to interference; (2) willful and intentional act of interference; (3) damages to P / prox. cause y Inducing a party to exercise a right given to that party in K is NOT tortious interference.

C in A/C relationship has right to discharge attny at any time! But what if inducement is independently tortious or against pub. pol.? y willful and intentional interfering party must (1) know of K and (2) intend to induce breach or believe substantially certain to induce y Damages: (1) pecuniary loss of benefits of K; (2) foreseeable consequential dmgs; (3) emotional distress or harm to reputation; and (4) exemplary dmgs if D acted fraudulently or with actual malice (ill will, spite, evil motive, or purposeful injury)  Interference w/ Prospective Business Relations (1) reasonable probability of business relations w/ 3d party; (2) malicious act (actual malice ill will, etc.) by D w/ intent of preventing relationship w/ purpose of harming P; and (3) actual harm or damages to P / causation. y Texas Rule: malicious act must also be independently tortious (e.g., fraudulent) or unlawful o Spoliation of Evidence  No independent tort of spoliation of evidence in Texas! (Ortega v. Trevino (Tex. 1998))  All spoliation must be dealt with in the case where it occurs via sanctions (monetary, precluding offending party from introducing evidence, or death penalty in egregious cases)  What if spoliation doesnt come to light until after the underlying lawsuit? Seek a bill of review! Spoliation may count as extrinsic fraudfraud pertaining to a collateral matter that prevents party from presenting its claims or defenses fully at trial. y Defensive Issues in Malpractice Actions y Statute of Limitations: o General Rule: P must institute suit w/ in 2 years from the date upon which the P either actually discovers or in the exercise of due diligence should have discovered, the facts establishing the elements of the cause of action.  Criminal cases: majority 2 yrs from innocence verdict; minority date of first discovery or should have discovered SOL is an affirmative defense that must be pleaded and proved  by the D. But P has burden to plead and prove any facts needed to establish existence and length of tolling period. Burden this shifts to D to prove that P either did or reasonably should have discovered facts > 2 yrs ago.  NOTE: In the case of malpractice by a lawyer, the lawyer has a fiduciary duty to tell the C that he has messed up. If the lawyer fails to do this, the C will not generally be held responsible for excercis[ing] due diligence to discover the problem. This helps the C, and pretty much ensures that the SOL will not start running until the C has actual knowledge.  Dispute v. transaction dispute SOL is 2 years from final appeal; transaction is 2 years from start of dispute o Hughes/Apex Towing Rule when attny commits malpractice in litigation, SOL on the malpractice claim tolls until all appeals on the underlying claim are exhausted (Hughes) or until litigation resulting from attnys malpractice in non-litigation setting is complete (Gulf Coast), or until litigation against other tortfeasors for same injury litigated in action where attny committed malpractice is concluded (Sanchez). Courts should not weight the policy reasons behind the rule for each case, but should just apply the rule to any case that falls within it. (Apex Towing)  NOTE: Some Ct. Apps. have not applied Huges/Apex Towing rule when malpractice has occurred in transactional setting and later leads to litigation. See, e.g., Murphy v. Mullin, Hoard, & Brown LLP (Tex. App.Dallas 2005) (holding transactional cases not within Apex rule). o Discovery Rule (Bell): SOL for legal malpractice actions does not begin to run until the claimant discovers or should have discovered through the exercise of reasonable care and diligence the facts establishing his cause of action. Discovery occurs when a plaintiff has knowledge of such facts, conditions, or circumstances as would cause a reasonably prudent person to make an inquiry that would lead to discovery of the cause of action. o Fraudulent Concealment SOL is tolled until fraud (by D in concealing the tort) is discovered or could have been discovered by reasonable diligence  Elements: (1) existence of underlying tort; (2) Ds knowledge of tort; (3) defendants use of deception to conceal the tort; (4) Ps reasonable reliance on the deception.  Must be pleaded and proved by P in response to a Ds please of SOL.

Because an A owes a C a fiduciary duty to disclose all material information, if A fails to disclose malpractice that he is aware of to C, this will count as deception and will trigger fraudulent concealment tolling of SOL. Tip: argue for Hughes/Apex treatement if filing MP against lawyer before resolution of litigation would undermine litigation position

o o o Other Defenses Prematurity or abatement Because of right to delay filing a malpractice action until underlying litigation is final (Hughes/Apex Towing Rule), Ps who sue for malpractice before finalization of suit will have suit abated until underlying litigation is final.  NOTE: K b/w C and A whereby attny waives SOL is enforceable. Contributory negligence Texas follows comparative negligence scheme; if P > 50% responsible, no recovery; otherwise, reduce recovery by Ps %  e.g., failure to follow As advice; Cs failure to provide accurate/material facts; C interference; Cs failure to pursue mitigating remedies In pari delicto P who participated in wrongdoing may not recover damages resulting from the wrongdoing  Exceptions: (1) P rsnbly relied on advice of attny re: legality of underlying act; (2) denying relief offends pub. pol. more than granting relief  But if Cs malfeasance was so obvious that the C knew or clearly should have know that what he was doing fraudulent or illegal, then the defense could succeed. See Quick v. Stamp (S.D. 2005) Assumption of risk abolished in Texas except for case where P knowingly and expressly consented to dangerous or risky activity Following Cs instructions A cant be liable for following Cs lawful instructions (if after adequate consultation) Non-assignability of claims malpractice claims may not be assigned (against public policy), regardless if arising from litigation or nonlitigation  V&E v. Moran (Tex. App.Hous. [14th] 1997) same rule applies to all claims related to As representation of a C Cs acceptance of settlement- Cs acceptance of settlement in underlying litigation is not total defense, but A can argue that settlement made P whole, and thus no damages from As alleged malpractice. Res judicata (cause of action same) precludes action btwn parties and their privies re: matters actually litigated in prior suit, as well as claims that arise out of same subject matter that could have been litigated in that suit. Affirmative defense.  Elements: (1)prior final jdgmt on the merits; (2) parties or privies are identical; (3) same cause of action involved or could have been involved Collateral Estoppel (facts same) prohibits re-litigation of a particular issue resolved in earlier suit (must be actually litigated!) Affirmative defense.  Elements: (1) issue or facts already fully and fairly litigated in prior action; (2) those facts were essential in prior action; (3) parties (or privies of parties) were cast as adversaries in the prior action  NOTE: When applied offensively (e.g., in a disciplinary hearing by disciplinary board), 3d element not required. (Goldstein if claim is identical (verbatim) in both tort and disciplinary action, and A loses tort, A is estoppeled from defending self in disciplinary proceeding, but reverse is not true if A wins in Tort state bar gets its own bite at the apple Equitable Estoppel used to prevent a party from later contradicting facts she previously represented as true by acts, words, or silence.  Elements: (1) false representation or concealment of material fact; (2) made w/ actual or constructive knowledge of those facts; (3) w/ intention that representation should be acted/relied on; (4) to a party w/o knowledge or means to obtain knowledge of the fact; (5) detrimental reliance  (equitable estoppels must be in writing) Judicial Estoppel prevents a party from contradicting a position taken and successfully asserted in a prior judicial proceeding  Elements: (1) a sworn, prior inconsistent statement made in a judicial proceeding; (2) successfully maintained; (3) not made inadvertently, by mistake, or pursuant to fraud or duress; (4) deliberate, clear, and unequivocal. Other: Sole Proximate Cause: Cs criminal or other misconduct in underlying transaction Peeler v. Hughes & Luce (Tex. 1995) as a matter of law,  convicted criminal D conduct is sole proximate cause of any harm resulting from conviction; thus the D cannot assert a malpractice claim against his A unless/until found innocent of the offense of which convicted.

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Schuwerk says convicted Ds should at least be able to sue for fee forfeiture under Burrow v. Arce for breach of fiduciary duty.  SOL maj. rule: c of a accrues when crim. D is found innocent; min rule: c of a accrues when D knows or should know of mal. (D screwed) Cs Failure to Mitigate Damages if C has failed to take rsnbl steps to mitigate dmgs, D may claim as partial defense.  Winters v. Brown (D.C. App. 1976) losing P has no duty to pursue less tenable claim against another D before suing A for malpractice Indemnity or Contribution may be able to seek contribution from co-counsel, but probably not predecessor or successor counsel Immunity  Prosecutors: absolute immunity for criminal cases, qualified imm. in admin. or investigative roles  Judges: immunity for all acts in judicial capacity. Exceptions: (1) actions not judicial in nature; (2) taken in complete absence of jurisdiction y Immunity extended to all officers of the court (clerks, bailiffs, ct. appointed receivers, guardians ad litem, etc.) Legislators: lawyers serving as legislators cannot be sued for action taken in that capacity that is adverse to a Cs interests Privilege As enjoy virtually absolute immunity from suit for any conduct taken on behalf of C in connection w/ litigation, even fraud! (see above) Release - release by a C of his A is presumptively fraudulent. Burden is on the A to show that the release is valid (full disclosure & C ind. represented)

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Rule 1.06: Conflicts of Interest General Rule (as o t e client is may not e obvious) y Protection of the clients confidential information is key concept when thinking about disqualifications for being tainted actual or potential access to confidential info y 1.06(a) A shall not represent opposing parties in same litigation. o Conflicts under this rule may NOT be consented to. y 1.06(b) A s all not represent a person or party if: o (1) The representation involves a substantially related matter in which the interests of the person are materially or directly adverse to interests of another C of A or As firm; o Doesnt outlaw rep of C1 in M1 and rep of C2 against C1 in M2. Does require permission and reasonable belief rep. will still be protective of Cs interests if M2 is SRM

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Rule 1.03: Communication Duties of to C: y 1.03(a) eep C reasonably informed and respond to reasonable requests for info y 1.03(b) Explain issues such that C can make an informed decision y Criminal cases y Conversations for past CRIMES are privileged but knowledge of physical evidence that you have or know where it is, is antiprivileged there is an affirmative obligation to turn evidence over to police y Conversations about future crimes are not protected y Civil cases y No obligation to volunteer info or evidence (discovery) Rule 1.04: ees and ee reements y 1.04(a) Do not enter into arrangement, charge, or collect illegal or unconscionable fee o unconscionable - competent lawyer could not form a reasonable belief that the fee is reasonable (note: nc ee diff b/w what you paid for and what you received is element of n c ee) o WARNING: Be careful w/ taking on fee that involves taking interest in Cs business venture. Make sure: (1) you fully disclose foreseeable problems, (2) agrmt. is fair and protective of C; (3) As upside is capped in reasonable manner; (4) urge C to consult ind. A; (5) obtain C consent in writing. o Retainers nonrefundable retainer may be unconscionable, depends on 1.04(b) factors of case. y 1.04(b) provides factors for determining reasonableness of fee: o (1) the time and labor required, the novelty and difficulty of the questions involved, and the skill requisite to perform the legal service properly; o (2) the likelihood, if apparent to the C, that the acceptance of the particular employment will preclude other employment by the lawyer; o (3) the fee customarily charged in the locality for similar legal services; o (4) the amount involved and the results obtained; o (5) the time limitations imposed by the C or by the circumstances; o (6) the nature and length of the professional relationship with the C; o (7) the experience, reputation, and ability of the lawyer or lawyers performing the services; and o (8) whether the fee is fixed or contingent on results obtained or uncertainty of collection before the legal services have been rendered y 1.04(c) nless A regularly represents C, A must communicate basis of fee to A in rsnbl time, preferably in writing. y 1.04(d) Contingent fees agreements must be (1) in writing, and (2) state method of determining fee. o Also, at end of representation, A must provide C w/ written statement explaining fee. o No heads I win, tails you lose agmts. Agmt. that violates rules not collectable! (Sanes v. lark)

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Rule 1.02: Scope and O jectives of Representation y 1.02(a) - Follow Cs directions regarding: (1) general objectives; (2) settlement; (3) criminal: plea, jury, whether to testify; o If A not willing to follow lawful instructions, must w/ draw if possible (may face discipline). o Must inform C of all stlmt. offers unless prior intrctns. make clear C will not accpt the offer. o Agreement giving A discretion to accept/reject offers violates rules and is void unenforceable (no fees!) (Sanes v. lar ) o Litigation strategy at As discretion, not Cs y 1.02(b) - ay limit scope and objectives of representation w/ disclosure and consent. o Does not mean you can contractually limit/waive liability or waive compliance w/ ules. y 1.02(c) - Dont assist or advise C to engage activity you know (or should kno or have reasonable belief) is fraudulent or criminal. ay counsel C in good faith on legality/extent of the law ( ote: A could be subject to criminal charge for assisting . read lightly) o Perjury if civ. case, A can refuse to call C to stand; in crim case, must call, but should not assist o No affirmative duty to investigate Cs objectives unless reasonable to do so. o Exception assisting violation to assess validity of statute (illegal parade example) y 1.02(d) - If A has conf. info clearly establishing C is likely to commit crime or fraud that will likely result in substantial injury make rsnbl. efforts to dissuade him y 1.02(e) - If A has conf. info clearly establishing As services were used in committing crime or fraud make rsnbl. effort to persuade to take corrective action. y 1.02(f) - If A knows C expects rep. not allowed by rules or law tell him what you can and cant do. o Must w/draw if continuation would violate rules. ule 1.15(a)(1) y 1.02(g) - If A reasonably believes C lacks competence take reasonable action to secure apptmt. of guardian. or other protective measures.

(Rule 1 C Relati s i ) Rule 1.01: Compete t a Dili e t Represe tation ic you are not competent, unless (1) anot er y 1.01(a) - Dont accept e ploy ent for competent A is associated, or (2) its an emergency o competence possession of t e legal knowledge, skill, and training reasona ly necessary for t e representation. ule 1.01, cmt. 1. o An A may accept a case even if not competent at t at time so long as e can ecome competent wit out undue expense or ot er prejudice to t e C. ule 1.01, cmt. 4. y 1.01( /c) - Dont neglect (conscious disregard) a matter or frequently fail to fully carry out any obligations owed t e C. o A can be disciplined for sufficiently aggravated neglect, even if no actual prejudice to C.

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o Must specify of gross or of net. If does not specify, will be construed as of net. y 1.04(e) No contingent fees in criminal cases. y 1.04(f) Division of fees t n. attnys. from different firmsmust be either (1) in proportion to work performed, or (2) made btwn. attnys. accepting joint responsibility. o C must consent in writing after full disclosure. Writing must communicate: (1) identity of all attnys; and (2) how fees will be split (basis of calculation): and (3) the share of the fee each A will receive o Joint responsibility Referring lawyer must only stay reasonably informed, respond to questions, and assist handling A when necessary. Must ensure adequacy of representation. o Need to stay with case start to finnish o A allowed to collect forwarding fee when conflict prohibits A from taking case o If no fee taken, 1.04 not applicable y 1.04(g) Any fee splitting agmt. not in compliance w/ 1.04(f) is not collectable, except attny. may recover reasonable value of services rendered and/or reasonable expenses incurred. y 1.04(h) 1.04(f) does not apply to payments to former partners or associates pursuant to separation or retirement agreement, or to referral via program certified under exas Lawyer Referral Service uality Act. y Rule 1.05: Confidentiality of Information en you can, cant and must reveal y Note: ts uniformly hold no privilege exists if s services were used in commission of crime or fraud y 1.05(a) definitions: o confidential information (CI) includes both of the following 2 terms o privileged information (PI) information protected as privileged under the RE and FRE  Generally applies when C makes communication to A for purpose of obtaining legal advice. o unprivileged C information (UCI) all other information related to C or furnished by C acquired by A during the course or by reason of representation of C y 1.05(b) A shall not: o (1) Reveal CI of C or former C to anyone other than C, Cs representatives, or attnys and employees of As law firm o (2) Use CI of C to disadvantage of C unless C consents after consultation o (3) Use CI of former C to the disadvantage of former C unless former C consents after consultation or the CI has become generally known o (4) Use PI of a C for advantage of A or 3d person unless C consents after consultation.  NOTE: UCI of C or CI of former C may be used for advantage of A or 3d person w/out consent so long as it does not disadvantage the C or former C in any way. y 1.05(c) A may reveal CI if: o (1) Expressly authorized to do so in order to carry out representation, o (2) When C consents after consultation, o (3) To C, Cs representatives, or attnys and employees of As law firm, unless directed otherwise by C, o (4) A has reason to believe necessary to comply w/ court order, these Rules, or other law, o (5) To the extent reasonably necessary to enforce claim or establish defense on behalf of A in controversy b/w A and C, o (6) To establish defense in criminal charge, civil claim, or disciplinary claim against A or As associates if based on conduct involving C or representation of C, o (7) A has reason to believe necessary to prevent C from committing a criminal or fraudulent act, o (8) To the extent reasonably necessary to rectify consequences of Cs criminal or fraudulent act in which As services were used. y 1.05(d) A may reveal UCI if: o (1) Implicitly authorized to do so to carry out representation; o (2) Necessary to do so in order to:  (i) Carry out representation effectively,  (ii) Defend A or As associates against claim of wrongful conduct;  (iii) Respond to allegations in any proceeding concerning As representation of C; or  (iv) Prove As fees in any action where seeking to recover such fees from another party. y 1.05(e) A MUS reveal CI to the extent that reasonably appears necessary if A has CI clearly establishing that C is likely to commit a criminal or fraudulent act that is likely to result in death or substantial bodily harm to a person. y 1.05(f) A MUS reveal CI if required to do so by Rule 3.03(a)(2), 3.03(b), or 4.01(b). o 3.03(a)(2) When disclosure to a tribunal is necessary to avoid assisting a criminal or fraudulent act o 3.03(b) If A has offered material false evidence, and c refuses to allow A to correct or withdraw evidence after As good faith effort to persuade C, A must take reasonable remedial measures, including disclosing the true facts. o 4.01(b) When disclosure to a 3d person is necessary to avoid making lawyer a party to a criminal act or knowingly assisting a fraudulent act committed by C. Note 1: proper function of legal sys req preserv by A of confidential info of one who has y employed or sought to employ A. Note 2: subject to mandatory discl under (e f) A generally required to maint conf of info acquired during reprntation.

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Rule 1.08: Conflict of Interest: Prohibited Transactions (Transactions

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Rule 1.09: Conflicts of Interest: ormer Cs y 1.09(a) Without prior consent, an A who has personally represented a C in a matter shall not later represent another person in a matter adverse to the former C: o (1) In which the new C is questioning the validity of As services or work product performed for the former C; (A who drew a will for C1 violates by representing heirs effort to overturn will) o (2) If the representation of the new C in reasonable probability will involve a violation of Rule 1.05 (confidential info); or  An A should ask himself: Is there something I know about the adverse C (As former C) that was obtained in through my prior representation of former C that would really help my current C in this case against the adverse C?  If the answer is yes, then there is reasonable probability that the new representation will involve a Rule 1.05 violation. o (3) if it is the same or a substantial related matter in which A represented the former C. (although not required under 1.05, Cts will often D A representing new C2 against original C1 in SRM to original representation of C1) y 1.09(b) Lawyers who are members of the same firm shall not knowingly represent a C if any other lawyer in that firm would be prohibited from representing the C under this Rule, E CEPT to the extent authorized by Rule 1.10. y 1.09(c) When a lawyer leaves a firm, the lawyers who were at the firm with that lawyer shall not knowingly represent a C if the departed lawyer would be prohibited from representing the C under 1.09(a)(1) or (a)(2). o This requires lawyers to consider whether (1) they will be questioning the work of any former A at their firm, and (2) whether there is any information still available at the firm (left over from the departed lawyer) such that there would be a reasonable probability of a Rule 1.05 violation. o Lawyers who cant handle adverse rep when tainted A(t) is denied right to handle C2s rep against C1  A who was at F1 with A(t) at time of rep of C1, did not personally rep C1, but is still at F1 - (1.09(b))  A who joined F1 after A(t)s former rep of C1 and is now associated with A(t) (1.09(b))  A who was at F1 when A(t) left and A(t)s departure occurred prior to C2 seeking rep by F1 1.09 (A(t)s old files remain at the firm access)  A at F2 that A(t) joined after A(t)s rep of C1 - 1.09(b) y Lawyer who CAN handle adverse rep y A who formerly was at A(t)s old firm or A(t)s new firm but now practices somewhere else once lawyer has moved on and is not associated with A(t) or A(t)s prior firm, A is no longer contaminated by A(t)s prior representations y NOTE: This rule only applies to lawyers. It does not apply to non-lawyers. Thus, a tainted nonlawyer may simply be screened out from a particular project, and will not taint her entire firm. y Former C as an adverse witness: This situation is not within the rule. It has never arisen in Texas, but in a federal case (Sykes v. Matter (M.D. Tenn. 2004), the court disqualified an A from deposing a former C, and current C was forced to hire outside counsel to deal with this one witness. y Law Student Clerks: A Texas court has held that a law student clerk that latter becomes a lawyer is considered a lawyer for purposes of Rule 1.09. In re XU U.S. olding o. (Tex. pp. aco 2002) (affd on other grounds not involving Rule 1.09 by Supreme Court.)

o (2) The representation reasonably appears to be or that it would become adversely limited by As or As firms responsibilities to another C or to a 3d party, or by As or As firms own interests. o Most often when lawyer is paid by non-client (insurance). Must alert insured to conflict immediately o NOTE: There is a Texas ethics opinion indicating that a parent company and all of its wholly owned subsidiary should be considered as one person/party. y 1.06(c) Even in situations described in 1.06(b), A may still undertake representation if: o (1) A reasonably believes that the representation of C will not be materially affected; and o (2) All affected or potentially affected Cs consent after full disclosure. o NOTE: In a disciplinary action, if Bar carries its burden to show violation of (b), burden is on A to show compliance w/ (c). y 1.06(d) If A represented multiple parties in a matter, he shall not later represent any of those parties in a dispute among those parties arising out of that past matter, unless all parties to the dispute consent. y 1.06(e) If A accepts representation in violation of this Rule, or if representations become improper under this Rule, A shall withdraw from one or more representations as necessary to come into compliance. y 1.06(f) If a lawyer would be prohibited from taking a particular representation under this Rule, no other lawyer in his firm may accept such representation. y Actually Tainted: The following lawyers become actually tainted: (1) lawyers that actually work on a matter, (2) lawyers that did not work on the matter, but work on cases substantially related to the matter, or (3) even those lawyers that do not work on a matter or a substantially related matter, but come into contact w/ confidential information from the matter. Actual taint follows you forever. y Vicariously Tainted: A lawyer is vicariously tainted if he works in the same firm as an actually tainted lawyer. A vicariously tainted lawyer becomes untainted when he leaves that firm. Also, in some cases, the VTL may become untainted if the tainted lawyer leaves the firm. y Disqualification of Counsel: Rules do not determine whether counsel is disqualified in litigation, but they do provide guidelines. D is personal right of party asserting, may be waived through failure to assert timely (Conoco) o Courts are more likely to find grounds for disqualification when rules are followed than they are to allow representation when rules are NOT followed. o no doubt A can be disqualified for obtaining access to opposing partys CI as a result of illegal otherwise unauthorized surreptitious activity even if A bears no responsibility Meador o See, e.g., In re Meador (Tex. 1998) - finding that A should not be disqualified even though he obtained access to opposing partys confidential information, but holding that it was not necessary to violate the disciplinary rules to be disqualified, and fashioning a 6-part test to determine when counsel should be disqualified in such a situation:  whether the lawyer knew or should have known that the material was privileged  the promptness with which the A notifies the opposing side that he or she has received its privileged information;  the extent to which the A reviews and digests the privileged information;  the significance of the privileged information, i.e. the extent to which its disclosure may prejudice the movants claim or defense and the extent to which return of the documents will mitigate the prejudice;  the extent to which movant may be at fault for the unauthorized disclosure; and  the extent to which the nonmovants will suffer prejudice from the disqualification of his or her A o In re NI , S. . de .V. (Tex. 2002) A different test applies when court erroneously orders discovery of confidential information. Disqualification is only appropriate when the party seeking it shows:  Opposing counsels reviewing the privileged documents caused actual harm to the moving party; and  Disqualification is necessary, because the trial court lacks any lesser means to remedy the moving partys harm. Rule 1.07: Conflict of interest: Intermediary (representation of 2 or more C with potentially conflicting interest) y Application of 1.07 should be limited to when: (1) the simultaneous rep. in the same matter of multiple C concerning the common interest; (2) adjustment of interest solely among the parties rather than b/w parties and a 3rd party; (3) should not entail litigation b/w parties y 1.07(a) An A shall not act as an intermediary b/w Cs unless: o (1) A fully consults w/ Cs on risks, benefits and effect on A/C privilege, and obtains consent; and o (2) A reasonably believes matter can be resolves w/o litigation, Cs will be able to make fully informed decisions, and little risk of material prejudice if resolution is unsuccessful; and o (3) A reasonably believes common representation can be undertaken impartially w/o improperly affecting the responsibilities A owes to any of the Cs. y 1.07(b) - While acting as intermediary, A shall consult w/ all Cs so each C can make an adequately informed decision y 1.07(c) If acting as an intermediary, A shall withdraw if: - Any of the Cs requests or - A can no longer satisfy requirements of 1.07(a). o Once A withdraws, he may not continue to represent any of the parties in that matter. y 1.07(d) An A acts as intermediary if the A represents two or more parties with potentially conflicting interests o Must be in the same matter, although the rule does not specify this. y 1.07(e) - If a lawyer would be prohibited from taking a particular representation under this Rule, no other lawyer in his firm may accept such representation. y NOTE: An arbitrator or mediator is NOT an intermediary. To be an intermediary, the parties to the dispute must both be the As Cs. y

y 1.08(a) An A shall not enter into business transaction w/ C unless: o (1) terms of the transaction are fair and reasonable to the C and are after full disclosure in a manner that can be fully understood by C; o (2) C is given opportunity to seek advice of independent counsel; and o (3) C consents in writing. y 1.08(b) An A shall not prepare an instrument giving A or As relatives (parent, child, sibling, or spouse) a substantial gift from a C (including a testamentary gift), UNLESS the C is related to the donee. y 1.08(c) Prior to conclusion of a matter, A shall not negotiate w/ C for agreement giving A literary or media rights to account based on the representation. y 1.08(d) An A shall not provide financial assistance to C in connection w/ pending or contemplated litigation or other proceeding E CEPT: o (1) A may advance court costs, litigation expenses, reasonably necessary medical and living expenses where repayment is contingent on the outcome of the case; and o (2) A who is representing an indigent C may pay court costs and litigation costs on Cs behalf. y 1.08(e) An A shall not accept compensation from someone other than the CUNLESS: (1) C consents; (2) there is no interference w/ As professional judgment or w/ A/C relationship; and (3) information is protected as required by Rule 1.05. y 1.08(f) An A representing multiple C may not make an aggregate settlement (or in criminal case, may not make aggregated agreement for guilty or nolo contender plea) unless each C has consented after consultation. o Consultation must include disclosure of nature and extent of participation of each person involved in the settlement. y 1.08(g) An A shall not make an agreement w/ C that prospectively limits As liability for malpractice unless C is independently represented. Also, A shall not settle a claim w/ an unrepresented C or former C w/o first advising that person in writing to seek independent representation. o NOTE: Arbitration clauses b/w As and Cs are generally enforceable. o NOTE: A violation of Rule 1.08(g) does not automatically render the release invalid, but a presumption of unfairness attaches. (National Union ire Insurance o. v. eck, Mahin, and ate) y 1.08(h) An A shall not acquire property interest in Cs cause of action, E CEPT: (1) A may acquire lien to secure As fees or expenses; and (2) A may in a civil case for a contingent fee under Rule 1.04. y 1.08(i) - If a lawyer would be prohibited from entering into a particular transaction under this Rule, no other lawyer in his firm may enter into such a transaction. y 1.08(j) excludes from business transactions lawyers normal legal services offered

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y Former Prospective Cs: An A and his entire firm may be disqualified from representing parties adverse to a former prospective C, even if the former prospective C never actually became a C, if the prospective C shared confidential info with the A. That A would become actually tainted. (In re erry). It is not clear whether this disciplinary rule would apply, or whether this principle applies only for disqualification purposes.

Rule 1.10: Successive overnment and private employment y 1.10(a) - Except as law may otherwise expressly permit, a lawyer shall not represent a private C in connection with a matter in which the lawyer participatedpersonally and substantiallyas a public officer or employee, unless the appropriate government agency consents after consultation. o A need not have been employed as an attny by the government. o A is only barred from representing C in same matter. A may represent C in substantially related matter y 1.10(b) - No lawyer in a firm with which a lawyer subject to paragraph (a) is associated may knowingly undertake or continue representation in such a matter unless: (1) The lawyer subject to paragraph (a) is screened from any participation in the matter and is apportioned no part of the fee therefrom; and (2) written notice is given with reasonable promptness to the appropriate government agency. o Screening should also be an adequate defense on disqualification motion. y 1.10(c) - Except as law may otherwise expressly permit, a lawyer having information that the lawyer knows or should know is confidential government information about a person or other legal entity acquired when the lawyer was a public officer or employee may not represent a private C whose interests are adverse to that person or legal entity. o confidential government information - see 1.10(g) for definition y 1.10(d) - After learning that a lawyer in the firm is subject to paragraph (c) with respect to a particular matter, a firm may undertake or continue representation in that matter only if that disqualified lawyer is screened from any participation in the matter and is apportioned no part of the fee therefrom. y 1.10 (e) An A serving as a public officer or employee shall not: (1) Participate in a matter involving a private C when the A had represented that C in the same matter while in private practice or nongovernmental employment, unless under applicable law no one is, or by lawful delegation may be, authorized to act in the lawyer's stead in the matter; or (2) Negotiate for private employment with any person who is involved as a party or as A for a party in a matter in which the A is participating personally and substantially. o For 1.10(e)(2), it appears that A may negotiate for employment after completion of matter in which he is involved. y 1.10 (f) - matter - does not include regulation-making or rule-making proceedings or assignments, but includes: (1) Any adjudicatory proceeding, application, request for a ruling or other determination, contract, claim, controversy, investigation, charge, accusation, arrest or other similar, particular transaction involving a specific party or parties; and (2) Any other action or transaction covered by the conflict of interest rules of the appropriate government agency. o Schuwerk says that although this particular rule makes an exception for rule-making proceeding, other rules/statutes may prohibit this. Be careful! y 1.10 (g) - confidential government information - information which has been obtained under governmental authority and which, at the time this rule is applied, the government is prohibited by law from disclosing to the public or has a legal privilege not to disclose, and which is not otherwise available to the public. y 1.10 (h) - Private C - includes not only a private party but also a governmental agency if the lawyer is not a public officer or employee of that agency. y 1.10 (i) - A lawyer who serves as a public officer or employee of one body politic after having served as a public officer of another body politic shall comply with paragraphs (a) and (c) as if the second body politic were a private C and with paragraph (e) as if the first body politic were a private C. Rule 1.11: Adjudicatory official or la cler y 1.11(a) - A lawyer shall not represent anyone in connection with a matter in which the lawyer has passed upon the merits or otherwise participated personally and substantially as an adjudicatory official or law clerk to an adjudicatory official, unless all parties to the proceeding consent after disclosure. o Schuwerk says first phrase should read A lawyer shall not personally represent . . . o adjudicatory official encompasses judges, judges pro tempore, referees, special masters, hearing officers, and other parajudicial offiers. 1.11, cmt. 2 o A Texas ethics opinion exists that treats mediators and arbitrators essentially just like adjudicatory officials for compliance with this rule. o This applies to law clerks even if they are not yet licensed attnys. 1.11, cmt. 3. y 1.11(b) - A lawyer who is an adjudicatory official shall not negotiate for employment with any person who is involved as a party or as A for a party in a pending matter in which that official is participating personally and substantially. A lawyer serving as a law clerk to an adjudicatory official may negotiate for employment with a party or A involved in a matter in which the clerk is participating personally and substantially, but only after the clerk has notified the adjudicatory official. o This does not apply to law clerks until they are licensed as attnys. 1.11, cmt. 3 But this is misleading. It would be a bad idea for an unlicensed law clerk to engage in behavior that would violate this rule. y 1.11(c) If paragraph (a) is applicable to a lawyer, no other lawyer in a firm with which that lawyer is associated may knowingly undertake or continue representation in the matter unless: (1) the lawyer who is subject to paragraph (a) is screened from participation in the matter and is apportioned no part of the fee therefrom; and (2) written notice is promptly given to the other parties to the proceeding. Rule 1.12: Or anization as a C y 1.12(a) - A lawyer employed or retained by an organization represents the entity. While the lawyer in the ordinary course of working relationships may report to, and accept direction from, an entity's duly authorized constituents, in the situations described in paragraph (b) the lawyer shall proceed as reasonably necessary in the best interest of the organization without involving

unreasonable risks of disrupting the organization and of revealing information relating to the representation to persons outside the organization. y 1.12(b) - A lawyer representing an organization must take reasonable remedial actionswhenever the lawyer learns or knows that: (1) an officer, employee, or other person associated with the organization has committed or intends to commit a violation of a legal obligation to the organization or a violation of law which reasonably might be imputed to the organization; (2) the violation is likely to result in substantial injury to the organization; and (3) the violation is related to a matter within the scope of the lawyer's representation of the organization. y 1.12(c) - Except where prior disclosure to persons outside the organization is required by law or other Rules, a lawyer shall first attempt to resolve a violation by taking measures within the organization. In determining the internal procedures, actions or measures that are reasonably necessary in order to comply with paragraphs (a) and (b), a lawyer shall give due consideration to the seriousness of the violation and its consequences, the scope and nature of the lawyer's representation, the responsibility in the organization and the apparent motivation of the person involved, the policies of the organization concerning such matters, and any other relevant considerations. Such procedures, actions and measures may include, but are not limited to, the following: (1) asking reconsideration of the matter; (2) advising that a separate legal opinion on the matter be sought for presentation to appropriate authority in the organization; and (3) referring the matter to higher authority in the organization, including, if warranted by the seriousness of the matter, referral to the highest authority that can act in behalf of the organization as determined by applicable law. o It is clear, although implicit, that an A may, in some cases, have to go outside the organization to comply with his duty to take reasonable remedial action. o If the A goes outside the organization, he must still comply with the confidentiality requirements of Rule 1.05. o In some cases, Rule 1.12 may transform the may reveal provisions in 1.05 into must reveal. See 1.05(e) (f). o This Rule also applies if the C organization is a govt entity. 1.12, cmt. 9. o Dont forget about Rule 1.02(d), which may impose a duty to dissuade your C from illegal or fraudulent activity. y 1.12(d) - Upon a lawyer's resignation or termination of the relationship in compliance with Rule 1.15, a lawyer is excused from further proceeding as required by paragraphs (a), (b) and (c), and any further obligations of the lawyer are determined by Rule 1.05. y 1.12(e) - In dealing with an organization's directors, officers, employees, members, shareholders or other constituents, a lawyer shall explain the identity of the C when it is apparent that the organization's interests are adverse to those of the constituents with whom the lawyer is dealing or when explanation appears reasonably necessary to avoid misunderstanding on their part. o If somehow the A creates an A/C relationship w/ the employee, such that he is the A for both employee and organization, if a conflict arises, he must withdraw from one of the representations. See 1.06(b) (e). o This Rule also applies if the C organization is a govt entity. 1.12, cmt. 9. Rule 1.14: Safe uarding property y 1.14(a) - A lawyer shall hold funds and other property belonging in whole or in part to Cs or third persons that are in a lawyer's possession in connection with a representation separate from the lawyer's own property. Such funds shall be kept in a separate account, designated as a trust or escrow account, maintained in the state where the lawyer's office is situated, or elsewhere with the consent of the C or third person. Other C property shall be identified as such and appropriately safeguarded. Complete records of such account funds and other property shall be kept by the lawyer and shall be preserved for a period of five yearsafter termination of the representation. o If A were to use funds for his own purposes, would be guilty of conversion, and can be criminally liable and subject to heavy disciplinary liability. o If C pays in advance, A must put money in trust account, and only transfer into his operating account as he actually bills time. y 1.14(b) - Upon receiving funds or other property in which a C or third person has an interest, a lawyer shall promptly notify the C or third person. Except as stated in this rule or otherwise permitted by law or by agreement with the C, a lawyer shall promptly deliver to the C or third person any funds or other property that the C or third person is entitled to receive and, upon request by the C or third person, shall promptly render a full accounting regarding such property. o If C makes baseless objections to paying 3rd party you should try to convince C to pay. o Disputed funds can be held until dispute is settled must pay C what they are entitled o File interpleader with judge and let the two parties argue in front of court o Only have to honor request for funds that are not in dispute cant favor client if law favors other party y 1.14(c) - When in the course of representation a lawyer is in possession of funds or other property in which both the lawyer and another person claim interests, the property shall be kept separate by the lawyer until there is an accounting and severance of their interest. All funds in a trust or escrow account shall be disbursed only to those persons entitled to receive them by virtue of the representation or by law. If a dispute arises concerning their respective interests, the portion in dispute shall be kept separate by the lawyer until the dispute is resolved, and the undisputed portion shall be distributed appropriately. o The dispute can be settled by filing an interpleader. o Letters of protection agreements where attnys guarantee expenses on behalf of C for services rendered to C, usually w/ agreement to pay when judgment is rendered for C  Letters of protection are governed by standard principles.  A should make C party to agreement. If C does not agree, A may have to cover costs in the end, and may not be able to pay costs out of the judgment/settlement. y Accurate and complete records include records of account funds and other documentation (bank statements alone insufficient, internal documentation is required as well) o Documentation of deposits showing it was clients money o Time sheets showing how much time was spent on case Rule 1.15: Declining or terminating representation y 1.15(a) [Mandatory withdrawal] A lawyer shall decline to represent a C or, where representation has commenced, shall withdraw, except as stated in paragraph (c), from the representation of a C, if: (1) the representation will result in violation of Rule 3.08, other applicable rules of professional conduct or other law; (2) the lawyer's physical, mental or psychological condition materially impairs the lawyer's fitness to represent the C; or o Rule 3.08 prohibits A from testifying in case where he is serving as counsel, except for in specified situations.

Rule 3.05: aintaining impartiality of tribunal - A lawyer shall not: y 3.05(a) - seek to influence a tribunal concerning a pending matter by means prohibited by law or applicable rules of practice or procedure; o See also Rule 8.04(a)(5), which prohibits an A from even implying the ability to improperly influence a govt agency or official. y 3.05(b) - except as otherwise permitted by law and not prohibited by applicable rules of practice or procedure, communicate or cause another to communicate ex partewith a tribunal for the purpose of influencing that entity or person concerning a pending matter other than: (1) in the course of official proceedings in the cause; (2) in writing if he promptly delivers a copy of the writing to opposing counsel or the adverse party if he is not represented by a lawyer; (3) orally upon adequate notice to opposing counsel or to the adverse party if he is not represented by a lawyer. o Even if judge initiates ex parte communication, any substantive response will be a violation of the rule. y 3.05(c) - For purposes of this rule: (1) Matter has the meanings ascribed by [sic] it in Rule 1.10(f) of these Rules; (2) A matter is pending before a particular tribunal either when that entity has been selected to determine the matter or when it is reasonably foreseeable that that entity will be so selected. Rule 3.08: Lawyer as witness y 3.08(a) - A shall not accept or continue employment before a tribunal in a contemplated or pending adjudicatory proceeding if the lawyer knows or believes that the lawyer is or may be a witness necessary to establish an essential fact on behalf of the lawyer's C, unless: (1) the testimony relates to an uncontested issue; (2) the testimony will relate solely to a matter of formality and there is no reason to believe that substantial evidence will be offered in opposition to the testimony; (3) the testimony relates to the nature and value of legal services rendered in the case; (4) the lawyer is a party to the action and is appearing pro se; or (5) the lawyer has promptly notified opposing counsel that the lawyer expects to testify in the matter and disqualification of the lawyer would work substantial hardship on the C. o The opposing part is not generally allowed to call the opposing A to the stand as a fact witness. If allowed, this could be used as a tactical ploy to get the A disqualified. In criminal case, Ds counsel may only be called upon showing that (1) there is no feasible alternative and (2) testimony is essential . . . to States case.Flores v. State (Tex. Crim. App. 2004) y 3.08(b) - A lawyer shall not continue as an advocate in a pending adjudicatory proceeding if the lawyer believes that the lawyer will be compelled to furnish testimony that will be substantially adverse to the lawyer's C, unless the C consents after full disclosure. y 3.08(c) - Without the C's informed consent, a lawyer may not act as advocate in an adjudicatory proceeding in which another lawyer in the lawyer's firm is prohibited by paragraphs (a) or (b) from serving as an advocate. If the lawyer to be called as a witness could not also serve as an advocate under this Rule, that lawyer shall not take an active role before the tribunal in the presentation of the matter.

Rule 2.02: Evaluation for use by third persons A lawyer shall not undertake an evaluation of a matter affecting a C for the use of someone other than the C unless: y 2.02(a) - the lawyer reasonably believes that making the evaluation is compatible with other aspects of the lawyer's relationship with the C; and y 2.02(b) - the C consents after consultation. Rule 3.01: eritorious claims and contentions A lawyer shall not bring or defend a proceeding, or assert or controvert an issue therein, unless the lawyer reasonably believes that there is a basis for doing so that is not frivolous. o To be disciplined under this rule, A must know that pleading is materially false or otherwise meritless in fact or law. o A is not subjet to discipline for merely failing to fully substantiate facts. 3.01, cmt. 3. o A may face sanctions under FRCP or TRCP for failure to reasonably inquire, but this Rule will not apply. o Standard for rule 11 sanctions is snapshot rule if what youve done may be sanctionable, if at the moment you made filing you believed Cs statements and you acted in good faith it is not sanctionable but if you continue to pursue once you no longer believe, it becomes sanctionable Rule 3.02: inimizing the burdens and delays of litigation In the course of litigation, a lawyer shall not take a position that unreasonably increases the costs or other burdens of the case or that unreasonably delays resolution of the matter. o An action must hav[e] some substantial purpose other than delay. 3.02, cmt. 5. o Unreasonable increase is key you are able to delay for tactical purposes and you need to be able to make motions or other acts for tactical purposes only in trouble if done exclusively to increase costs or delay Rule 3.03: Candor toward the tribunal (Tx requires mandatory disclosure if A knows that the D is not telling truth) (Nixon v. Whitesides once perjury occurs A should reveal to the court) y 3.03(a) A lawyer shall not knowingly: o (1) make a false statement of material fact or law to a tribunal; o (2) fail to disclose a fact to a tribunal when disclosure is necessary to avoid assisting a criminal or fraudulent act; o (3) in an ex parte proceeding, fail to disclose to the tribunal an unprivileged fact which the lawyer reasonably believes should be known by that entity for it to make an informed decision; o (4) fail to disclose to the tribunal authority in the controlling jurisdiction known to the lawyer to be directly adverse to the position of the C and not disclosed by opposing counsel; or  Case law and ethics opinion have interpreted directly adverse very broadly to encompass virtually any controlling authority that court should consider in deciding the issue. o (5) offer or use evidence that the lawyer knows to be false. y 3.03(b) - If a lawyer has offered material evidence and comes to know of its falsity, the lawyer shall make a good faith effort to persuade the C to authorize the lawyer to correct or withdraw the false evidence. If such efforts are unsuccessful, the lawyer shall take reasonable remedial measures, including disclosure of the true facts. o What if C lies on cross-examination, such that you did not introduce the evidence? This situation does not fall literally w/ in the rule, but cmts to the rule suggest that disclosure of the perjured testimony is optional. It is NOT mandatory. owever, the lawyer CANNOT use what the C said if he knows its false; this would violate (a)(5).

y 1.15(b) [Permissive withdrawal] Except as required by paragraph (a), a lawyer shall notwithdraw from representing a C unless: (1) withdrawal can be accomplished without material adverse effect on the interests of the C; (2) the C persists in a course of action involving the lawyer's services that the lawyer reasonably believes may be criminal or fraudulent; (3) the C has used the lawyer's services to perpetrate a crime or fraud; (4) a C insists upon pursuing an objective that the lawyer considers repugnant or imprudent or with which the lawyer has fundamental disagreement; (5) the C fails substantially to fulfill an obligation to the lawyer regarding the lawyer's services, including an obligation to pay the lawyer's fee as agreed, and has been given reasonable warning that the lawyer will withdraw unless the obligation is fulfilled;(6) the representation will result in an unreasonable financial burden on the lawyer or has been rendered unreasonably difficult by the C; or o This paragraph allows an A to withdraw at any time w/out discipline if one of the conditions in this are met. o Financial burden under (b)(6) must be extreme. o NOTE: Under prior law, predecessor of (b)(6) did not justify withdrawal because the C refuses to accept the As advice w/ respect to a decision that properly belongs to C (e.g., whether or not to agree to settlement).  It is unclear under new Rule whether A can be sanctioned for this, but Auguston v. inea Aerea Nacional- hile, S.A. (5th Cir. 1996) (applying Texas law) held that A could not recover any fees if he withdraws for such reasons. y 1.15(c) - When ordered to do so by a tribunal, a lawyer shall continue representation notwithstanding good cause for terminating the representation. o An A may disclose to the court all grounds for mandatory withdrawal if there are any. y 1.15(d) - Upon termination of representation, a lawyer shall take steps to the extent reasonably practicable to protect a C's interests, such as giving reasonable notice to the C, allowing time for employment of other counsel, surrendering papers and property to which the C is entitled and refunding any advance payments of fee that has not been earned. The lawyer may retain papers relating to the C to the extent permitted by other law only if such retention will not prejudice the C in the subject matter of the representation. o A recent Texas ethics committee decision which defines papers very broadly. It makes virtually everything produced or done in relation to the Cs case or project part of papers. o Another ethics opinion includes computer files w/ in the scope of papers. Rule 2.01: Advisor In advising or otherwise representing a C, a lawyer shall exercise independent professional judgment and render candid advice.

y 3.03(c) - The duties stated in paragraphs (a) and (b) continue until remedial legal measures are no longer reasonably possible. o Duty applies so long as disclosure could still benefit opposing party. 3.03, cmt. 14 y material any matters . . . that the judge would attach importance to and would be induced to act on in making a ruling Cohn v. Commn for awyer iscipline (Tex. AppHou. [14th]) y NOTE: Thus rule permits an A to remain silent when neither he nor his C have made a false statement, but A knows that court is relying on mistaken factual information provided by other party that benefits As C! But, an A must disclose authority, i.e, case law or statutes, that are adverse to his Cs position. Rule 3.04: airness in adjudicatory proceedings A lawyer shall not: y 3.04(a) - unlawfully obstruct another party's access to evidence:in anticipation of a dispute unlawfully alter, destroy or conceal a document or other material that a competent lawyer would believe has potential or actual evidentiary value; or counsel or assist another person to do any such act. o An A need only act negligently to violate this rule. o No duty to assist opponent in obtaining evidence, however, unless it is tangible physical evidence of a crime. There is an unresolved tension b/w this requirement and A/C confidentiality requirements. y 3.04(b) - falsify evidence, counsel or assist a witness to testify falsely, or pay, offer to pay, or acquiesce in the offer or payment of compensation to a witness or other entity contingent upon the content of the testimony of the witness or the outcome of the case. But a lawyer may advance, guarantee, or acquiesce in the payment of: (1) expenses reasonably incurred by a witness in attending or testifying; (2) reasonable compensation to a witness for his loss of time in attending or testifying; (3) a reasonable fee for the professional services of an expert witness. o A cant pay a witness to not testify, or to just disappear or take a long vacation. o Also, no Mary Carter agreements, where P settles w/ one D, who guarantees a certain judgment against other D and stays party in the case and deflects all blame on other D. y 3.04(c) - except as stated in paragraph (d), in representing a C before a tribunal: (1) habitually violate an established rule of procedure or of evidence; (2) state or allude to any matter that the lawyer does not reasonably believe is relevant to such proceeding or that will not be supported by admissible evidence, or assert personal knowledge of facts in issue except when testifying as a witness; (3) state a personal opinion as to the justness of a cause, the credibility of a witness, the culpability of a civil litigant or the guilt or innocence of an accused, except that a lawyer may argue on his analysis of the evidence and other permissible considerations for any position or conclusion with respect to the matters stated herein; (4) ask any question intended to degrade a witness or other person except where the lawyer reasonably believes that the question will lead to relevant and admissible evidence; or (5) engage in conduct intended to disrupt the proceedings. y 3.04(d) - knowingly disobey, or advise the C to disobey, an obligation under the standing rules of or a ruling by a tribunal, except for an open refusal based either on an assertion that no valid obligation exists or on the C's willingness to accept any sanctions arising from such disobedience. y Per rule 2.01 need to tell client about downside of this action pissing court off y 3.04(e) - request a person other than a C to refrain from voluntarily giving relevant information to another partyunless: (1) the person is a relative or an employee or other agent of a C; and (2) the lawyer reasonably believes that the person's interests will not be adversely affected by refraining from giving such information.

o Does not prevent the testifying A form working on the case. He just cannot actively participate in the courtroom proceedings. Rule 4.01: Truthfulness in statements to others In the course of representing a C a lawyer shall not knowingly: y 4.01(a) - make a false statement of material fact or law to a third person; or y 4.01(b) - fail to disclose a material fact to a third person when disclosure is necessary to avoid making the lawyer a party to a criminal act or knowingly assisting a fraudulent act perpetrated by a C. y NOTE: Cmt. 1 to this rule makes clear that certain statements made during negotiations may be viewed as negotiating positions rather than representation of material fact. Also, it make clear that certain transactions may be undertaken on behalf of an undisclosed principal without violating this rule unless such failure would be fraudulent. Rule 4.02: Communication with person represented by counsel y 4.02(a) - In representing a C, a lawyer shall not communicate or cause or encourage another to communicate about the subject of the representation with a person, organization or entity of government the lawyer knows to be represented by another lawyer regarding that subject, unless the lawyer has the consent of the other lawyer or is authorized by law to do so. o Party-to-party comm. are okay so long as not caused or encouraged by A. The rule does not impose a duty to discourage comm. btwn. parties. o If a person who was represented tells you that he has fired his A and wants to meet w/ you, this Rule does not required you to contact the A to verify before meeting w/ the person. (In re User System Services Inc.) Note now, however, that person is not represented, so Rule 4.03 applies. y 4.02(b) - In representing a C a lawyer shall not communicate or cause another to communicate about the subject of representation with a person or organization a lawyer knows to be employed or retained for the purpose of conferring with or advising another lawyer about the subject of the representation, unless the lawyer has the consent of the other lawyer or is authorized by law to do so. (cant talk to oppositions expert witness w/o permission) y 4.02(c) - For the purpose of this rule, organization or entity of government includes: (1) those persons presently having a managerial responsibility with an organization or entity of government that relates to the subject of the representation, or (2) those persons presently employed by such organization or entity and whose act or omission in connection with the subject of representation may make the organization or entity of government vicariously liable for such act or omission. o NOTE: Once a person is no longer employed by an organization, an A may freely contact them unless they are independently represented in the matter. o Lower level employees can be contacted w/o permission cant be used to extract PI y 4.02(d) - When a person, organization, or entity of government that is represented by a lawyer in a matter seeks advice regarding that matter from another lawyer, the second lawyer is not prohibited by paragraph (a) from giving such advice without notifying or seeking consent of the first lawyer. Rule 4.03: Dealing with unrepresented person In dealing on behalf of a C with a person who is not represented by counsel, a lawyer shall not state or imply that the lawyer is disinterested. When the lawyer knows or reasonably should know that the unrepresented person misunderstands the lawyer's role in the matter, the lawyer shall make reasonable efforts to correct the misunderstanding. Rule 4.04: Respect for rights of third persons y 4.04(a) - In representing a C, a lawyer shall not use means that have no substantial purpose other than to embarrass, delay, or burden a third person, or use methods of obtaining evidence that violate the legal rights of such a person. o This rule applies to the examination of witnesses. A must have some substantial purpose other than to embarrass, delay, or burden the witness. y 4.04(b) - A lawyer shall not present, participate in presenting, or threaten to present: (1) criminal or disciplinary charges solely to gain an advantage in a civil matter; or (2) civil, criminal or disciplinary charges against a complainant, a witness, or a potential witness in a bar disciplinary proceeding solely to prevent participation by the complainant, witness or potential witness therein. o NOTE: Conflict/tension with Rule 8.03(a) requires an A to report sufficiently serious Rule violations to the appropriate authorities. Thus, an A must proceed carefully. o NOTE: ou cant make the threat through your C either. See Rule 8.04(a). o Also, a settlement agreement agreeing not to report a violation is probably void in Texas. o NOTE: There is a disciplinary procedure rule that gives complete immunity from suit (e.g., for defamation) to disciplinary complainants. Rule 5.01: Responsibilities of a partner or supervisory lawyer A lawyer shall be subject to discipline because of another lawyer's violation of these rules of professional conduct if: y 5.01(a) - The lawyer is a partner or supervising lawyer and orders, encourages, or knowingly permits the conduct involved; or y 5.01(b) - The lawyer is a partner in the law firm in which the other lawyer practices, is the general counsel of a government agency's legal department in which the other lawyer is employed, or has direct supervisory authority over the other lawyer, and with knowledge of the other lawyer's violation of these rules knowingly fails to take reasonable remedial action to avoid or mitigate the consequences of the other lawyer's violation. o NOTE: Rule 8.03 imposes a separate duty to report violations. This duty is not satisfied by taking remedial action under this rule. Rule 5.02: Responsibilities of a supervised lawyer A lawyer is bound by these rules notwithstanding that the lawyer acted under the supervision of another person, except that a supervised lawyer does not violate these rules if that lawyer acts in accordance with a supervisory lawyer's reasonable resolution of an arguable question of professional conduct. o It is not a defense for a disciplinary rule violation for a junior A that he was only following orders. But, junior A may rely on senior As reasonable resolution of an arguable question. Rule 5.03: Responsibilities regarding nonlawyer assistants With respect to a nonlawyer employed or retained by or associated with a lawyer:

y 5.03(a) - a lawyer having direct supervisory authority over the nonlawyer shall make reasonable efforts to ensure that the person's conduct is compatible with the professional obligations of the lawyer; and y 5.03(b) - a lawyer shall be subject to discipline for the conduct of such a person that would be a violation of these rules if engaged in by a lawyer if: (1) the lawyer orders, encourages, or permits the conduct involved; or (2) the lawyer: (i) is a partner in the law firm in which the person is employed, retained by, or associated with; or is the general counsel of a government agency's legal department in which the person is employed, retained by or associated with; or has direct supervisory authority over such person; and (ii) with knowledge of such misconduct by the nonlawyer knowingly fails to take reasonable remedial action to avoid or mitigate the consequences of that person's misconduct. o NOTE: This rule does not impose a negligent supervision standard. Actual knowledge or encouragement is required. o This imposes somewhat of a strict liability std. lawyer here resp. whether the conduct happens knowingly or otherwise Rule 5.04: Professional independence of a lawyer ( sharing fees and partnering w/ nonlawyers) y 5.04(a) - A lawyer or law firm shall not share or promise to share legal fees with a non-lawyer, except that: (1) an agreement by a lawyer with the lawyer's firm, partner, or associate, or a lawful court order, may provide for the payment of money, over a reasonable period of time, to the lawyer's estate to or for the benefit of the lawyer's heirs or personal representatives, beneficiaries, or former spouse, after the lawyer's death or as otherwise provided by law or court order. (2) a lawyer who undertakes to complete unfinished legal business of a deceased lawyer may pay to the estate of the deceased lawyer that proportion of the total compensation which fairly represents the services rendered by the deceased lawyer; and (3) a lawyer or law firm may include non-lawyer employees in a retirement plan, even though the plan is based in whole or in part on a profit-sharing arrangement. o Obviously, non-lawyer employees can be paid out of funds received as legal fees. Payment of non-lawyer employees must be pursuant to independent not linked to a fixed of firms profits or revenues. o This rule is narrowly applied to direct, explicit linkages y 5.04(b) - A lawyer shall not form a partnership with a non-lawyer if any of the activities of the partnership consist of the practice of law. y 5.04(c) - A lawyer shall not permit a person who recommends, employs, or pays the lawyer to render legal services for another to direct or regulate the lawyer's professional judgment in rendering such legal services. o NOTE: This rule does not limit the use of in-house counsel. It only bars a non-A from directing or regulating a As professional judgment when the non-A is paying for legal services for another. In in-house situation, the C is the company employing the A. It is okay for the C to direct the As judgment. But, be careful when C asks in-house to render advice for wholly-owned subsidiary or joint venture. This could be another. o NOTE: 2 courts of appeals in Texas have held that insurance companies may hire their own lawyers to represent their insureds (Eastland and S.A. The S.C. has granted review, but has not yet issued an opinion. y 5.04(d) - A lawyer shall not practice with or in the form of a professional corporation or association authorized to practice law for a profit, if: (1) a nonlawyer owns any interest therein, except that a fiduciary representative of the estate of a lawyer may hold the stock or interest of the lawyer for a reasonable time during administration; (2) a nonlawyer is a corporate director or officer thereof; or (3) a nonlawyer has the right to direct or control the professional judgment of a lawyer. Rule 5.05:Unauthorized practice of law A lawyer shall not: y 5.05(a) - practice law in a jurisdiction where doing so violates the regulation of the legal profession in that jurisdiction; or o Modern trend: allows As admitted in one state to conduct incidental transactions in another state even though not licensed there. o But, law of each individual law determines whether practice constitutes practice in that state and whether authorized or not. o States may provide means for admission pro hac vice for litigation matters. y Important factors fore assessing whether there is a violation o Isolated event or widespread practice by A o Whether admission pro hac vice o Length of As professional association with C o Extent in state matters being handled are intertwined with out of state issues o Whether lawyer has made any effort to limit his rep to out of state matters and merely supervise work on local matters by in state A y Insurance in house counsel is insurer practicing law by providing legal services to its clients conflicting logic and issues here supreme ct says its ok for Insurance co to reperesent clients as long as the Cs interests are aligned with the ICs y the insurance company in providing an attorney to the insured is "seeking to protect its own interests." Even though the attorney does represent the insured, the insurance company is not practicing law because of the company's direct financial interest in the litigation against the insured. There is no violation of Tex. Bus. Corp. Act Ann. art. 2.01B(2) because the purpose of an insurance company is to indemnify its insureds. The agreement to defend and pay attorney's fees is collateral to that purpose. y 5.05(b) - assist a person who is not a member of the bar in the performance of activity that constitutes the unauthorized practice of law. o NOTE: If non-lawyer messes up, you could be subject to vicarious liability if he/she was working for you, w/ in scope of employment, and authorized. o NOTE: This encompasses helping another A who is licensed in another state, but not this state, practice law here. o NOTE: Meaning of practice of law and unauthorized practice of law are unclear in Texas. Definitions differ from state to state also. Rule 5.06: Restrictions on right to practice A lawyer shall not participate in offering or making: y 5.06(a) - a partnership or employment agreement that restricts the rights of a lawyer to practice after termination of the relationship, except an agreement concerning benefits upon retirement;

Rule 8.05: Jurisdiction y 8.05(a) - A lawyer is subject to the disciplinary authority of this state, if admitted to practice in this state or if specially admitted by a court of this state for a particular proceeding. In addition to being answerable for his or her conduct occurring in this state, any such lawyer also may be disciplined here for conduct occurring in another jurisdiction or resulting in lawyer discipline in another jurisdiction, if it is professional misconduct under ule 8.04. o If dsplnd. in other state, will not be dsplnd. here unless a vltn. of Tex. rules. o Conduct occurring in other state that violates these rules will not normally be punished if not in violation of that states rules. 8.05, cmt. 4. y 8.05(b) - A lawyer admitted to practice in this state is also subject to the disciplinary authority for: (1) an advertisement in the public media that does not comply with these rules and that is broadcast or disseminated in another jurisdiction, . . ., if the broadcast or dissemination of the advertisement is intended to be received by prospective Cs in this state and is intended to secure employment to be performed in this state; and (2) a written solicitation communication that does not comply with these rules and that is mailed in another jurisdiction, . . ., if the communication is mailed to an addressee in this state or is intended to secure employment to be performed in this state. Rule: 9.01: Severability If any provision of these Rules or any application of these Rules to any person or circumstances is held invalid, such invalidity shall not affect any other provision or application of these Rules that can be given effect without the invalid provision or application and, to this end, the provisions of these Rules are severable. Admission Unauth Practice of Law: 8.03, 5.05 Concealment of Evidence: 3.02, 3.03(a)(3)-(4) Discipline Reporting Misconduct: 8.03, 8.04(a), (b) Duty to Disclose Adverse Authority: 3.03(a)(3)-(4) Colleague Misconduct: 5.01, 5.02, 5.03 Improper Influence of Judges: 3.04(e), 3.05, 3.06, 8.04 Billing Tort Liability: 1.12(a), 1.07, 5.03(a), 1.08, 8.04, 8.03, 8.04, 3.07, 3.09 Truth Falsity in Litigation: 3.01, 3.03, 3.04, 4.01 Ls Duties During Non-Trial Proceedings: 3.10 Communications w/ Opposing Counsel/3rd Parties: 4.01-4.04 A/C Relationship/Communication: 1.01-1.03 Terminating A/C Relationship: 1.15 Confidentiality: 1.05 Conflicts of Interest: 1.05-1.12, 1.15 Forwarding Fee/Fee Division: 1.04(f)-(h) Supervision issues unauthorized practice of law, Causes of Action: Malpractice (Client only), BOFD (Client only), Breach of (Client only), Conversion, Spoliation (not separate cause of action), Fraud (E I), Negligent Mis, DTPA, Civil Consp, Mal Prosec, IIED DEFENSES: AOR, Following Inst, Prematurity/Abatement, CN, In Pari Delicto, Non-Assig, C Accpt of Settlement, Collateral Est, Res Judi, Equit Est, Suit w/in suit, Statute of Limitations, Tortuous interference (w/ business relations) Report conduct to SBOT Analysis

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y 5.06(b) - an agreement in which a restriction on the lawyer's right to practice is part of the settlement of a suit or controversy, except that as part of the settlement of a disciplinary proceedings against a lawyer an agreement may be made placing restrictions on the right of that lawyer to practice. y NOTE: Rstrctv. covenants on As are not enforceableviolation of public policy. y But see ray v. Noteboom (Tex.App.Ft. Worth 2005, rev. denied) (upholding arbitration award enforcing a non-compete agreement) Rule 5.08: Prohibited discriminatory activities y 5.08(a) -A lawyer shall not willfully, in connection with an adjudicatory proceeding, except as provided in paragraph (b), manifest, by words or conduct, bias or prejudice based on race, color, national origin, religion, disability, age, sex, or sexual orientation towards any person involved in that proceeding in any capacity. y 5.08(b) - Paragraph (a) does not apply to a lawyer's decision whether to represent a particular person in connection with an adjudicatory proceeding, nor to the process of jury selection, nor to communications protected as confidential information under these Rules. See Rule 1.05(a), (b). It also does not preclude advocacy in connection with an adjudicatory proceeding involving any of the factors set out in paragraph (a) if that advocacy: (1) is necessary in order to address any substantive or procedural issues raised by the proceeding; and (2) is conducted in conformity with applicable rulings and orders of a tribunal and applicable rules of practice and procedure. o NOTE: Many other states do not allow As to decline Cs on these bases. o NOTE: Striking jurors on basis of these factors may be impermissible or even unconstitutional, but is not a disciplinary violation. Rule 6.01: Accepting appointments by a tribunal A lawyer shall not seek to avoid appointment by a tribunal to represent a person except for good cause, such as: y 6.01(a) - representing the C is likely to result in violation of law or rules of professional conduct; o Reasons under this could include inter alia that (1) A is not competent and cannot become competent w/ reasonable effort, see Rule 1.01(a); or (2) would cause a conflict of interest.See Rule 1.06-11. y 6.01(b) - representing the C is likely to result in an unreasonable financial burden on the lawyer; or y 6.01(c) - the C or the cause is so repugnant to the lawyer as to be likely to impair the C-lawyer relationship or the lawyer's ability to represent the C. Rule 8.01: Bar admission, reinstatement, and disciplinary matters An applicant for admission to the bar, a petitioner for reinstatement to the bar, or a lawyer in connection with a bar admission application, a petition for reinstatement, or a disciplinary matter, shall not: y 8.01(a) - knowingly make a false statement of material fact; or y 8.01(b) - fail to correct a misapprehension known by the person to have arisen in the matter, or knowingly fail to respond to a lawful demand for information from an admission, reinstatement, or disciplinary authority, except that this rule does not require disclosure of information otherwise protected by Rule 1.05. y NOTE: Courts have not required proof of intent to find violation! y 5th Amendment A may claim it in a disciplinary proceeding (Spevack v. lein(U.S. 1967)), but may not invoke it in admission or reinstatement proceedings. y RULE: A/C privilege outweighs this duty; thus Board cannot force applicant or disciplinary defendant to give information his C in this context. Rule 8.02: Judicial and legal officials y 8.02(a) - A lawyer shall not make a statement that the lawyer knows to be false or with reckless disregard as to its truth or falsity concerning the qualifications or integrity of a judge, adjudicatory official or public legal officer, or of a candidate for election or appointment to judicial or legal office. y 8.02(b) - A lawyer who is a candidate for judicial office shall comply with the applicable provisions of the Texas Code of Judicial Conduct. y 8.02(c) - A lawyer who is a candidate for an elective public office shall comply with the applicable provisions of the Texas Election Code. Rule 8.03: Reporting professional misconduct y 8.03(a) - Except as permitted in paragraphs (c) or (d), a lawyer having knowledge that another lawyer has committed a violation of applicable rules of professional conduct that raises a substantial question as to that lawyer's honesty, trustworthiness or fitness as a lawyer in other respects, shall inform the appropriate disciplinary authority. o NOTE: This requires that violation be fairly substantial. o NOTE: This in no way limits the violations that an A may report. y 8.03(b) - Except as permitted in paragraphs (c) or (d), a lawyer having knowledge that a judge has committed a violation of applicable rules of judicial conduct that raises a substantial question as to the judge's fitness for office shall inform the appropriate authority. y 8.03(c) - A lawyer having knowledge or suspecting that another lawyer or judge whose conduct the lawyer is required to report pursuant to paragraphs (a) or (b) of this Rule is impaired by chemical dependency on alcohol or drugs or by mental illness may report that person to an approved peer assistance program rather than to an appropriate disciplinary authority. If a lawyer elects that option, the lawyer's report to the approved peer assistance program shall disclose any disciplinary violations that the reporting lawyer would otherwise have to disclose to the authorities referred to in paragraphs (a) and (b). Alternative to reporting TLAP Tx Lawyers Assistance Program y y 8.03(d) - This rule does not require disclosure of knowledge or information otherwise protected as confidential information: (1) by rule 1.05 or (2) by any statutory or regulatory provision applicable to the counseling activities of the approved peer assistance program. o A who cmmts. a vltn. may hire an A, and this A is not rqrd. to report his C. Rule 8.04: isconduct y 8.04(a) - A lawyer shall not: o (1) violate these rules, knowingly assist or induce another to do so, or do so through the acts of another, whether or not such violation occurred in the course of a C-lawyer relationship;

o (2)commit a serious crime, or commit any other criminal act that reflects adversely on the lawyer's honesty, trustworthiness or fitness as a lawyer in other respects; o (3)engage in conduct involving dishonesty, fraud, deceit or misrep.;  No rqrmt. that dishnsty., frd., or misrept by material. (Eureste)  Scienter: not defined in Tex.; other states have required recklessness o (4) engage in conduct constituting obstruction of justice; o (5)state or imply an ability to influence improperly a govt agcy. or offcl.;  No defense that A never actually acted or attempted to influence. o (6)knowingly assist a judge or judicial officer in conduct that is a violation of applicable rules of judicial conduct or other law; o (7)violate any disciplinary or disability order or judgment; o (8)fail to timely furnish to the Chief Disciplinary Counsel's office or a district grievance committee a response or other information as required by the Texas Rules of Disciplinary Procedure, unless he or she in good faith timely asserts a privilege or legal ground for failure to do so; o (9)engage in conduct that constitutes barratry as defined by [Tex. law];  barratry instituting suit by person w/ no interest or knowledge that claim is false soliciting legal business from potential clients based on a particular event (ambulance chasing); practice of bringing repeated legal actions solely to harass o (10)fail to comply with section 13.01 of the Texas Rules of Disciplinary Procedure relating to notification of an A's cessation of practice; o (11)engage in the practice of law when the lawyer is on inactive status or when the lawyer's right to practice has been suspended or terminated, including but not limited to situations where a lawyer's right to practice has been administratively suspended for failure to timely pay required fees or assessments or for failure to comply with Article II of the State Bar Rules relating to Mandatory Continuing Legal Education; o (12) violate any other laws of this state relating to the professional conduct of lawyers and to the practice of law. y 8.04(b) - As used in subsection (a)(2) of this Rule, serious crime means barratry; any felony involving moral turpitude; any misdemeanor involving theft, embezzlement, or fraudulent misappropriation or money or other property; or any attempt, conspiracy, or solicitation of another to commit any of the foregoing crimes. o Not all felonies involve moral turpitude per se (e.g., agrvtd. asslt. poss. of cntld. sub. for personal use). In re ock (crimes of moral turpitude must involve dishonesty, fraud, deceit, misrep., or deliberate violence, or must reflect adversely on As honesty, trustworthiness, or fitness as an A.).

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Tort action B of FD

Disciplinary action Template answer: To succeed, a suit for will require proof of (elements). In this situation it is clear that act A satisfies element A, act B satisfies element B. what is less clear is whether the facts will allow P to prove element C. Whether or not the requirement for element C can be satisfied will depend upon. If , the requirement for element C will probably be satisfied, however, if it is less likely, unlikely that element C will be satisfied and P will not succeed in her claim for .

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