Tuesday, March 12, 2013

"In a Box"

Stephen Gillers, Regulation of Lawyers
"In a Box"

1    We saw this situation as confidentiality issue relating to Martin’s representation of F&B. Martin cannot disclose information acquired in the course of representing F&B without their informed consent per MRP 1.6. Some subsequent issues to consider: Does Martin have an attorney-client relationship with Marsh? We felt that he does on account of the two meetings.

2. Martin could and in fact must get consent from F&B to tell Marsh about the investigation of Endicott. Failure to do would breach F&B’s confidentiality. We see this as a situation where the informed consent of F&B could cure a potential conflict of interest relating to Martin’s duties to his two clients. Two follow-up questions: 1) Are these facts actually “information relating to the representation of a client” per 1.6? Yes; even though the investigation is simply parallel to the F&B investigation, this is nonetheless information obtained during the scope of the representation.

2) Does this information fall within the scope of the 1.6(b)(3) exception for “substantial injury to the financial interests of another that is “reasonably certain to occur?” We did not believe this exception because the injury was not reasonably certain to occur, although more facts would be needed to determine this.

3. No because to do so would a breach of Martin’s fiduciary duty to Marsh. Martin’s duties an attorney (including his fiduciary duty and his duty of loyalty) require that he disclose this relevant information to his client Marsh. The information directly bears on his representation of Marsh and in order to represent her zealously and effectively, he would need to disclose it. If he could not do so, he also couldn’t represent Marsh without breaching his fiduciary duty; he would likely need to remove himself from the representation, although Sally and the firm might be able to continue to represent Marsh.

4. We’re unsure of what the obligations and requirements are between Martin and Sally. Martin definitely has to tell Marsh about the Endicott investigation or remove himself from the representation; we think he probably has to tell Sally as the lead counsel on the deal. Sally could continue to represent Marsh on the deal if Martin never spoke up because the issues at hand don’t concern the scope of her duties. The relevance of the comment regarding possible representation by a new attorney is suspect at best.

Some additional talking points/themes:

-Fiduciary vs. Confidentiality to different clients

-Intra-firm relations; what do the lawyers owe each? Partner-associate? Co-counsel?

-Is the Right to Know implicated in a situation like this where the information in question doesn’t involve actual legal claims?

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