• Abstract and Figures
• Public Full-text

18th Annual Advanced Conference on Commercial Real Estate Leases

“Ethics and Strategies” December 15, 2006

1.0 Ethics Credit

By

Professor John A. Strait Seattle University School of Law 901 – 12th Avenue P. O. Box 222000 Seattle, WA 98122-1090

c:strait/cle/18th Annual ‘Annual Adv. Conf on Commercial Real Estate Leases. 12.15.06.doc Page 1 JOHN A. STRAIT, Associate Professor of Law, Seattle University School of Law. Professor Strait received his B.A. from the University of California/Davis 1966 and his J.D. from Yale Law School 1969. Admitted to practice U. S. Supreme Court; the U. S. Court of Appeals, D.C. Circuit and Ninth Circuit; the Federal District Courts of Northern California, Eastern and Western Washington, Oregon, and Wyoming. Member of the California, Oregon, and Washington state bars, he consults and lectures nationally in the fields of criminal law and procedure, civil and criminal trial advocacy, legal and judicial ethics, and legal malpractice. He is a former Chair and has served as a member of the Washington State Bar Association Criminal Law Section for more than 25 years. He has served on several Washington Supreme Court Task Forces in Criminal law and procedure. He also teaches and consults on expert witness roles in forensic psychology and psychiatry.

c:strait/cle/18th Annual ‘Annual Adv. Conf on Commercial Real Estate Leases. 12.15.06.doc Page 2 Table of Contents

Washington State Bar Association Creed of Professionalism...... 3 Resources...... 3 Primary Legal Ethics Materials for Washington State...... 3 Multi-State or Subject-based Legal Ethics Research...... 3 LIST OF OPTIONS TO MINIMIZE OR ALLOW CONFLICTS...... 3 Supreme Court Adopts "Ethics 2003" Amendments to Rules of Professional Conduct...3 RPC RULE 1.0: TERMINOLOGY...... 3 RPC RULE 1.2: SCOPE OF REPRESENTATION AND ALLOCATION OF AUTHORITY BETWEEN CLIENT AND LAWYER...... 3 RPC RULE 1.5: FEES...... 3 RPC RULE 1.6 CONFIDENTIALITY OF INFORMATION...... 3 RPC RULE 1.7: CONFLICT OF INTEREST; CURRENT CLIENTS...... 3 RPC RULE 1.8: Conflict Of Interest: Current Clients: Specific Rules...... 3 RPCRULE 1.9: DUTIES TO FORMER CLIENTS...... 3 RPC RULE 1.10: Imputation of Conflicts of Interest: General Rule...... 3 RPC RULE 1.13: ORGANIZATION AS CLIENT...... 3 RPC RULE 1.15A: SAFEGUARDING PROPERTY...... 3 RPC RULE 1.15B: REQUIRED TRUST ACCOUNT RECORDS...... 3 RPC RULE 3.3: CANDOR TOWARD THE TRIBUNAL...... 3 RPC RULE 3.4: FAIRNESS TO OPPOSING PARTY AND COUNSEL...... 3 RPC RULE 3.7: LAWYER AS WITNESS...... 3 RPC RULE 4.1: TRUTHFULNESS IN STATEMENTS TO OTHERS...... 3 RPC RULE 4.2: COMMUNICATION WITH PERSON REPRESENTED BY COUNSEL...... 3 RPC RULE 4.3: DEALING WITH UNREPRESENTED PERSON...... 3 RPC RULE 4.4: RESPECT FOR RIGHTS OF THIRD PERSON...... 3 RPC RULE 8.3: REPORTING PROFESSIONAL MISCONDUCT...... 3 RPC RULE 8.4: MISCONDUCT...... 3 HYPOTHETICALS...... Error! Bookmark not defined.

c:strait/cle/18th Annual ‘Annual Adv. Conf on Commercial Real Estate Leases. 12.15.06.doc Page 3 Washington State Bar Association Creed of Professionalism

As a proud member of the legal profession practicing in the state of Washington, I endorse the following principles of civil professional conduct, intended to inspire and guide lawyers in the practice of law.

- In my dealings with lawyers, parties, witnesses, members of the bench, and court staff, I will be civil and courteous and guided by fundamental tenets of integrity and fairness. - My word is my bond in my dealings with the court, with fellow counsel, and with others.

- I will endeavor to resolve differences through cooperation and negotiation, giving due consideration to alternative dispute resolution.

- I will honor appointments, commitments and case schedules, and be timely in all my. communications.

- I will design the timing, manner of service; and scheduling of hearings only for proper purposes, and never for the objective of oppressing or inconveniencing my opponent.

- I will conduct myself professionally during depositions, negotiations, and any other interaction with opposing counsel as if I were in the presence of a judge.

- I will be forthright and honest in my dealings with the court, opposing counsel, and others.

- I will be respectful of the court, the legal profession, and the litigation process in my attire and in my demeanor. - As an officer of the court, as an advocate and as a lawyer, I will uphold the honor and dignity of the court and of the profession of law. I will strive always to instill and encourage a respectful attitude toward the courts, the litigation process, and the legal profession. This creed is a statement of professional aspiration adopted by the Washington State Bar Association Board of Governors on July 27, 2001, and does not supplant or modify the Washington Rules of Professional Conduct.

c:strait/cle/18th Annual ‘Annual Adv. Conf on Commercial Real Estate Leases. 12.15.06.doc Page 4 Resources

Resources for Advice

WSBA Hotline re Ethics - Christopher Sutton, (206) 727-8219 Written submission of Inquiry for (in)formal opinion from the RPC Committee [Call (206) 727-8219 for information on how to do it] WSBA Web Address: www.wsba.org (Ethics, Professional Responsibility)

Available Consultants in the Field

Professor Thomas Andrews, University of Washington Law School, (206) 543-2644 Professor Robert Aronson, University of Washington Law School, (206) 543-7423 Professor David Boerner, Seattle University School of Law, (206) 398-4016 Kurt G. Bulmer, Esquire, (206) 325-9949; [email protected] Leland G. Ripley, toll free at 1-866-890-3525, or 424-377-8737; fax to 425-377-0660 Professor John Strait, Seattle University School of Law, (206) 398-4027; [email protected]

Basic Resource Tools

THE ABA/BNA MANUAL ON PROFESSIONAL RESPONSIBILITY (BNA Publications) HAZARD & HODES, THE LAW OF LAWYERING (2d. ed. Prentice-Hall) Illustrative Conflict Situations Encountered by Business Practitioners, CONFLICTS OF INTEREST IN BUSINESS TRANSACTIONS: GUIDELINES FOR THE BUSINESS LAWYER (WSBA 1990, updated 1995) Available in full text on-line at http://www.wsba.org/lawyers/groups/businesslaw/businesslawpublicationconflict.htm WOLFRAM, MODERN LEGAL ETHICS (West Publishing Company) RESTATEMENT OF THE LAW THIRD, THE LAW GOVERNING LAWYERS, 2 Volumes, American Law Institute, (2000) WSBA ETHICS 2003 COMMITTEE (to review proposed WA RPCs) http://www.wsba.org/lawyers/groups/ethics2003/default.htm

c:strait/cle/18th Annual ‘Annual Adv. Conf on Commercial Real Estate Leases. 12.15.06.doc Page 5 Primary Legal Ethics Materials for Washington State Rules of Professional Conduct www.courts.wa.gov/court_rules/?fa=court_rules.list&group=ga&set=RPC Rules for Enforcement of Lawyer Conduct www.courts.wa.gov/court_rules/?fa=court_rules.list&group=ga&set=ELC WSBA Formal Opinions (Browseable) www.wsba.org/lawyers/ethics/formalopinions/default1.htm WSBA Formal and Informal Opinions (Searchable) http://pro.wsba.org/io/search.asp Disciplinary Notices Search Page http://pro.wsba.org/PublicDisciplineSearch.asp Code of Judicial Conduct www.courts.wa.gov/court_rules/?fa=court_rules.list&group=ga&set=CJC Discipline Rules for Judges www.courts.wa.gov/court_rules/?fa=court_rules.list&group=ga&set=DRJ Commission on Judicial Conduct—Rules of Procedure www.cjc.state.wa.us/Gov_provision/cjcrp.htm Commission on Judicial Conduct—Public Actions www.cjc.state.wa.us/CJC_Activity/public_actions.htm Judicial Ethics Opinions www.courts.wa.gov/programs_orgs/pos_ethics/ Ethics in Public Service Act www.leg.wa.gov/RCW/index.cfm?fuseaction=chapterdigest&chapter=42.52 Legislative Ethics Board (Includes formal, advisory, and complaint opinions) www.leg.wa.gov/common/ethics/ethop.htm Washington Executive Ethics Board Advisory Opinions http://ethics.wa.gov/index_adv_opinions.html

c:strait/cle/18th Annual ‘Annual Adv. Conf on Commercial Real Estate Leases. 12.15.06.doc Page 6 Multi-State or Subject-based Legal Ethics Research ABA Model Rules of Professional Conduct www.abanet.org/cpr/mrpc/mrpc_home.html ABA Net—The Center for Professional Responsibility www.abanet.org/cpr/ American Judicature Society www.ajs.org Ethics 2000—The ABA Commission on the Evaluation of the Rules of Professional Conduct /www.abanet.org/cpr/ethics2k.html FindLaw Ethics and Professional Responsibility Page www.findlaw.com/01topics/14ethics/index.html Freivogel on Conflicts www.freivogelonconflicts.com Hricik.com—Links to Ethics Rules and Opinions www.hricik.com/StateEthics.html LLI—Legal Information Institute, American Legal Ethics Library (Cornell) www.law.cornell.edu/ethics/ Zimmerman’s Research Guide to Legal Ethics www.lexisnexis.com/infopro/zimmerman/disp.aspx?z=1623 LLRX.com—Research Wire A Web of Legal Ethics: Rules of Professional Conduct www.llrx.com/columns/ethics.htm Google www.google.com Teoma www.teoma.com

c:strait/cle/18th Annual ‘Annual Adv. Conf on Commercial Real Estate Leases. 12.15.06.doc Page 7 LIST OF OPTIONS TO MINIMIZE OR ALLOW CONFLICTS

A. Limited scope of representation (see RPC 1.2)

B. Statements of representation and non-representation (see RPCs 1.2, 1.4)

C. Confidentiality waivers (see RPC 1.6)

D. Conflict waivers (see RPCs 1.7, 1.8, 1.9, 1.10, 1.11, 1.12, 2.2)

E. Termination of representation letters

F. Court authorization (see RPC 3.7)

G. Motions in limine to test the right of representation

H. Chinese wall/screening … not! (mostly)

c:strait/cle/18th Annual ‘Annual Adv. Conf on Commercial Real Estate Leases. 12.15.06.doc Page 8 Supreme Court Adopts "Ethics 2003" Amendments to Rules of Professional Conduct. by Guest Columnist Douglas Ende In the March 2005 Bar News1 it was reported that the Washington State Supreme Court had published 185 pages of proposed changes to Washington's Rules of Professional Conduct (RPCs).2 After a public comment period that expired on April 29, 2005, the Supreme Court Rules Committee began the ponderous task of scrutinizing those proposed changes, evaluating the comments received, and crafting the amendments that the Court ultimately adopted en banc (by a 7-2 vote) on July 10, 2006. The effective date of these amendments is September 1, 2006. A complete set of the amended rules is available on the Administrative Office of the Courts website: www.courts.wa.gov/court_rules/?fa=court_rules.adopted. 3 What Do I Need to Know? Many of the RPCs remain essentially the same. For example, RPC 1.1 (Competence) is identical to the rule originally adopted in 1985. In other cases, the text of a rule has been reorganized or clarified, but there is no substantive change to a lawyer's ethical obligations. For example, RPC 1.7 (Conflict of Interest) has been streamlined and simplified, but its principles and the manner in which it applies will remain the same. In other instances, the amended rules do alter the nature of an ethical duty or impose new obligations. And in a few areas, entirely new rules have been adopted. One change that will be unmistakable to any lawyer reviewing the amended rules is the inclusion throughout of official comments. These comments are based on the comments to the Model Rules (and the numbering of the comments in Washington's RPCs corresponds to the numbering of the Model Rules comments). The comments are intended to explain and illustrate the meaning and purpose of the rules. As indicated in paragraph [21] of the "Preamble and Scope," though the comments are intended as guides to interpretation, the text of each rule is authoritative. In situations where Washington's version of a rule is significantly different from the Model Rule or subject to an established interpretation in our state, additional "Washington Comments" are appended to the official comments to provide customized guidance and information. Owing to the scope and magnitude of the revisions to the RPCs, it would be prudent for every Washington lawyer to devote adequate time to the study of the amended rules and the comments. To whet your appetite for the task, this month's "Executive's Report" features a sampling of items of interest and significance in the new rules. As you review the amended RPCs, watch for the following: • Inclusion of new exceptions to RPC 1.6 (Confidentiality of Information), including an exception (identical to its Model Rule counterpart) that permits disclosure "to prevent, mitigate, or rectify substantial injury to the financial interests or property of another that is reasonably certain to result or has resulted from the client's commission of a crime or fraud in furtherance of which the client has used or is using the lawyer's services." RPC 1.6(b)(3).

. Reprinted with permission from Washington Sate Bar News. c:strait/cle/18th Annual ‘Annual Adv. Conf on Commercial Real Estate Leases. 12.15.06.doc Page 9 • A new mandatory duty to disclose otherwise confidential information of a client "to prevent reasonably certain death or substantial bodily injury." RPC 1.6(b)(1). This revision was made by the Court following the public comment period. By contrast, the counterpart Model Rule designates this as a permissive rather than a mandatory disclosure. The "Ethics and the Law" column on page 40 in this issue of Bar News addresses the changes to RPC 1.6 in more detail. • A substantial number of clarifications to the rules governing conflicts of interest. See RPC 1.7, 1.8, 1.9, 1.10, 1.11 and 1.12. Note further that the former rule governing "Intermediaries," RPC 2.2, has been deleted. Representation of multiple clients in the same matter is now governed exclusively by RPC 1.7, with additional guidance provided by Comments [29] – [33] of that rule. • Advanced costs and expenses of litigation may be contingent on the outcome of a matter. RPC 1.8(e)(1). This is consistent with the Model Rule but represents a conspicuous change from Washington's former rule, which required that a client remain ultimately liable for advanced court costs and litigation expenses. Though the WSBA Board of Governors recommended retaining the existing rule, the Supreme Court opted to conform this provision to the Model Rule. In addition, a lawyer representing an indigent client may pay court costs and expenses of litigation on behalf of the client. RPC 1.8(e)(2). • Adoption of RPC 1.13 (Organization as Client), clarifying the lawyer's role when representing an organization, and defining the lawyer's obligation upon learning that an officer, employee, or other constituent is violating or intends to violate the law. Previously, the omission of Rule 1.13 was a substantial nonconformity between Washington's RPCs and the Model Rules. • Clarifications and amendments to the rule governing trust accounts, and addition of a new rule governing trust-account recordkeeping. See RPC 1.15A and 1.15B. Unlike the current trust- account rule (RPC 1.14), RPC 1.15 expressly applies to both the property of clients and the property of third persons in the lawyer's possession. It specifies that only a lawyer admitted to practice may be an authorized signatory on the account. And it regulates the withdrawal and disbursement of trust-account funds and the reconciliation of records with greater specificity. • New RPC 1.15B, governing trust-account recordkeeping, specifies the types of records that a lawyer must maintain and requires that trust-account records must be retained for at least seven years after the events they record. • Addition of new RPC 1.17, governing the sale of a law practice. Unlike the Model Rule counterpart, Washington's version does not require that a seller of a law practice cease to engage in the private practice of law or in the area of practice that has been sold. • Addition of new RPC 1.18, governing a lawyer's duties to a prospective client. A prospective client is defined by the rule as "[a] person who discusses with a lawyer the possibility of forming a client-lawyer relationship with respect to a matter." A lawyer is under a duty to maintain the confidentiality of information learned in a consultation with a prospective client. RPC 1.18(b). Additionally, a lawyer may, unless specified precautions were taken, be disqualified from a representation of another person if the lawyer received significantly harmful information from a prospective client. RPC 1.18(c). Because the rule provides for screening of an individually disqualified lawyer, such disqualification will not in all cases be imputed to an entire firm. See RPC 1.18(d)(2). c:strait/cle/18th Annual ‘Annual Adv. Conf on Commercial Real Estate Leases. 12.15.06.doc Page 10 • Addition of new RPC 2.4, governing a lawyer's duties when serving as a third-party neutral. The rule requires a lawyer serving as a third-party neutral, such as a mediator, arbitrator, or conciliator, to explain the lawyer's role in the matter to unrepresented parties. • Retention of existing RPC 3.3 (Candor to the Tribunal), which governs a lawyer's duty of truthfulness to a court or other tribunal. The Board of Governors had recommended adoption of the Model Rule, requiring a lawyer who gains actual knowledge of an offer of false material evidence by a client to take remedial measures, up to and including disclosure of otherwise confidential information to the tribunal. The Supreme Court opted to retain Washington's variant approach, which prohibits any disclosure to the tribunal that is not permitted by RPC 1.6. • Addition of a new provision, identical to the Model Rule, governing the circumstances in which a lawyer is prohibited from communicating with jurors after discharge of the jury. See RPC 3.5(c). • A change in the scope of the disqualification when a lawyer is likely to be a necessary witness. Washington's existing RPC 3.7 imputes such a disqualification to other lawyers in the same firm. The amended rule, which is identical to the counterpart Model Rule, dispenses with such imputed disqualification, unless there is an actual conflict of interest under RPC 1.7 or 1.9. See RPC 3.7(b). • Addition of a new provision in RPC 3.8 (Special Responsibilities of a Prosecutor), which prohibits a prosecutor from subpoenaing a lawyer in a criminal proceeding to present evidence about a past or present client, except in limited circumstances. See RPC 3.8(e). This is identical to the Model Rule. • Addition of a new provision governing a lawyer's duty to notify the sender upon receipt of a document that the lawyer knows or reasonably should know was inadvertently sent. See RPC 4.4(b). This is identical to the Model Rule. • Significant revisions to RPC 5.5 relating to the multijurisdictional practice of law. Under amended RPC 5.5, in defined circumstances a lawyer admitted only in another state may practice law in Washington on a temporary basis in connection with a matter arising in another jurisdiction, as long as such a lawyer does not establish a continuous and systematic presence in Washington. Such a lawyer will, however, be subject to the disciplinary jurisdiction of Washington under amended RPC 8.5 (Disciplinary Authority; Choice of Law). Note that under RPC 5.5(d)(1), a lawyer providing legal services to the lawyer's employer or its organizational affiliates (for example, an in-house corporate lawyer) may provide those legal services in Washington without being admitted to practice here, as long as the services are not those for which pro hac vice admission is required. Because of the adoption of this provision, it is no longer necessary for most "house counsel" to be specially admitted to practice in Washington. The existing special admission rule for "house counsel," APR 8(f), has been amended to apply only to "foreign house counsel," i.e., a lawyer admitted to practice law in other than a U.S. jurisdiction. • Retention of the existing discretionary rule on reporting the professional misconduct of another lawyer or a judge. See Rule 8.3. Though the Board of Governors had recommended adoption of the Model Rule, which requires a lawyer to report serious professional misconduct to the c:strait/cle/18th Annual ‘Annual Adv. Conf on Commercial Real Estate Leases. 12.15.06.doc Page 11 appropriate authority, the Supreme Court opted to retain Washington's longstanding approach, which encourages but does not require such reporting. How Did We Get Here? The process leading to these changes began in late 2002, when the WSBA Board of Governors established the Special Committee for the Evaluation of the Rules of Professional Conduct (Ethics 2003 Committee) to review Washington's RPCs in light of substantial changes made by the ABA to the Model Rules of Professional Conduct. The Ethics 2003 Committee, chaired by Ellen Conedera Dial, conducted an extensive process of review and analysis over a 13-month period and issued a report with its recommendations in March 2004.4 Recognizing the importance of consistency and uniformity in rules regulating lawyer conduct, the Ethics 2003 Committee recommended adoption of the Model Rules, together with associated commentary, unless there was a compelling and articulable reason for deviation. In general, the content of the amendments suggested by the Ethics 2003 Committee substantially paralleled the ABA Model Rules in form and substance. In some instances, the Committee recommended that existing RPC provisions be retained or that new Washington-specific provisions be adopted. The great majority of the Committee's recommendations were approved and adopted by the Board of Governors.5 In October 2004, the WSBA submitted the recommendation as a whole to the Washington State Supreme Court as a set of suggested amendments under GR 9. After publication as proposed amendments in January 2005 and a public comment period, the Court adopted most of the Ethics 2003 amendments as proposed, though the Court did make a number of significant changes. What Should I Do Next? As Washington lawyers begin to adapt to the revised rules, on the horizon are a number of CLE programs designed to assist practitioners in making the transition. On September 18, 2006, WSBA-CLE will present The New Rules of Professional Conduct seminar at the Red Lion Hotel in Seattle. The seminar — co-chaired by Gail McMonagle, professional standards counsel at Perkins Coie and vice chair of the WSBA Disciplinary Board, and Chris Sutton, WSBA professional responsibility counsel — will highlight the significant changes to the rules and emerging ethics issues created by the RPC amendments. This half-day seminar will be provided in the morning and repeated in the afternoon; it will also be videotaped and available later online. In addition, all WSBA-CLE seminars this fall that have an ethics session will emphasize the relevant RPC changes. On December 13 and 14, the fourth annual WSBA Conference on the Law of Lawyering, co-chaired by Mark Johnson and J. Donald Curran, will include sessions focusing on the practical effects of the amended rules, including the impact of the Supreme Court's decision to adopt official comments. Watch for brochures and information about both programs on the WSBA-CLE website.6 The Law Office Management Assistance Program (LOMAP) will feature sessions on important changes to the RPCs in its 2006 Traveling Seminar, LOMAP & Ethics …On the Road, held at multiple locations throughout the state. And on September 22, LOMAP Advisor Pete Roberts will be presenting a session titled "Fraud in the Law Office and Update on (New) RPC 1.15A and B for Trust Accounts" at the 12th annual Tacoma Pierce-County Bar Association c:strait/cle/18th Annual ‘Annual Adv. Conf on Commercial Real Estate Leases. 12.15.06.doc Page 12 Convention at the Semiahmoo Resort in Blaine. More information about these events and other LOMAP programs is available on the WSBA website,7 or call the LOMAP coordinator at 206- 733-5914 or 800-945-WSBA, ext. 5914. Those interested in the implications of the changes to the trust-account rules may want to attend a September 8 program sponsored by the Spokane County Bar Association titled "Running a Law Practice 1: Tips and Tools." For more information, call the SCBA at 509-477-6032. A program sponsored by the King County Bar Association Solo/Small Firms Law Section is planned for September 15. For more information about this session, call KCBA at 206-267-7100. Also watch for an upcoming "Ask the Auditor" column in Bar News that will discuss the changes to the trust account rules. One of the purposes of the Ethics 2003 amendments was to clarify the rules of ethics governing the conduct of Washington lawyers. But ethical dilemmas will inevitably arise. The WSBA Ethics Line is available to help members analyze ethical issues, apply the proper rules, and make an ethically sound decision. Professional Responsibility Counsel Christopher Sutton and Douglas Ende were both involved in the process that led to the Ethics 2003 revisions. You can speak to them directly on the Ethics Line at 800-945-9722, ext. 8284, or 206-727-8284.

Douglas Ende is WSBA assistant general counsel and professional responsibility counsel and can be reached at [email protected] or 206-733-5917. NOTES

1. See "Ethics and the Law: Supreme Court Publishes Proposed Amendments to Rules of Professional Conduct for Public Comment," Washington State Bar News (March 2005), at http://www.wsba.org/media/publications/barnews/2005/mar-o5-supreme.htm.

2. These proposed amendments were published in the January 18, 2005, Washington Reports official advance sheets. See 153 Wn.2d No. 1.

3. A link is also available on the WSBA homepage, www.wsba.org, as well as on the Ethics 2003 Committee web page on the WSBA website: www.wsba.org/lawyers/groups/ethics2003.

4. A copy of the Committee's report, along with a detailed discussion of the various recommended changes, is available on the Ethics 2003 web page: www.wsba.org/lawyers/groups/ethics2003.

5. Instances in which the Board revised the Committee's recommendations are noted in a supplement to the Ethics 2003 Committee Report, also available on the WSBA website. See Board of Governors' Revisions to Ethics 2003 Committee Recommendations, at http://www.wsba.org/lawyers/groups/ethics2003/board ofgovernorsrevisionswithcomments.doc.

6. See http://www.wsba.org/cle.

7. See http://www.wsba.org/lawyers/services/-lomap.htm.

c:strait/cle/18th Annual ‘Annual Adv. Conf on Commercial Real Estate Leases. 12.15.06.doc Page 13 (g) "Partner" denotes a member of a partnership a shareholder in a law RPC RULE 1.0: TERMINOLOGY firm organized as a professional corporation, or a member of an association authorized to practice law. (a) "Belief" or "believes" denotes that the person involved actually (h) "Reasonable" or "reasonably" when used in relation to supposed the fact in question to be true. A person's belief conduct by a may be inferred lawyer denotes the conduct of a reasonably prudent and from circumstances. competent lawyer.

(b) "Confirmed in writing," when used in reference to the (i) "Reasonable belief" or "reasonably believes" when used informed in reference consent of a person, denotes informed consent that is given to a lawyer denotes that the lawyer believes the matter in in writing by question and the person or a writing that a lawyer promptly transmits to that the circumstances are such that the belief is reasonable. the person confirming an oral informed consent. See paragraph (e) for (j) "Reasonably should know" when used in reference to a the definition lawyer denotes of "informed consent." If it is not feasible to obtain or that a lawyer of reasonable prudence and competence would transmit the ascertain the writing at the time the person gives informed consent, then matter in question. the lawyer must obtain or transmit it within a reasonable time thereafter. (k) "Screened" denotes the isolation of a lawyer from any participation (c) "Firm" or "law firm" denotes a lawyer or lawyers in a law in a matter through the timely imposition of procedures partnership, professional corporation, sole proprietorship or within a firm that other are reasonably adequate under the circumstances to protect association authorized to practice law; or lawyers employed information that in a legal the isolated lawyers is obligated to protect under these Rules services organization or the legal department of a or other law. corporation or other organization. (l) "Substantial" when used in reference to degree or extent (d) "Fraud" or "fraudulent" denotes conduct that has a denotes a purpose to deceive material matter of clear and weighty importance. and is fraudulent under the substantive or procedural law of the applicable (m) "Tribunal" denotes a court, an arbitrator in a binding jurisdiction, except that it is not necessary that anyone has arbitration suffered proceeding or legislative body, administrative agency or damages or relied on the misrepresentation or failure to other body acting inform. in an adjudicative capacity. A legislative body, administrative agency or (e) "Informed consent" denotes the agreement by a person other body acts in an adjudicative capacity when a neutral to a proposed official, after course of conduct after the lawyer has communicated the presentation of evidence or legal argument by a party or adequate information parties, will and explanation about the material risks of and reasonably render a binding legal judgment directly affecting a party's available interests in a alternatives to the proposed course of conduct. particular matter.

(f) "Knowingly," "known," or "knows" denotes actual (n) "Writing" or "written" denotes a tangible or electronic knowledge of the fact record of a in question. A person's knowledge may be inferred from communication or representation, including handwriting, circumstances. typewriting,

c:strait/cle/18th Annual ‘Annual Adv. Conf on Commercial Real Estate Leases. 12.15.06.doc Page 14 printing, photostating, photography, audio or videorecording [3] [Washington revision] With respect to the law and e-mail. A department of an "signed" writing includes an electronic sound, symbol or organization, there is ordinarily no question that the process attached members of the to or logically associated with a writing and executed or department constitute a firm within the meaning of the Rules adopted by a of person with the intent to sign the writing. Professional Conduct. There can be uncertainty, however, as to the identity of the client. For example, it may not be clear whether the Comment law department Confirmed in Writing of a corporation represents a subsidiary or an affiliated [1] If it is not feasible to obtain or transmit a written corporation, as confirmation at well as the corporation by which the members of the the time the client gives informed consent, then the lawyer department are directly must obtain or employed. A similar question can arise concerning an transmit it within a reasonable time thereafter. If a lawyer unincorporated has obtained a association and its local affiliates. client's informed consent, the lawyer may act in reliance on that consent [4] Similar questions can also arise with respect to lawyers so long as it is confirmed in writing within a reasonable time in legal aid thereafter. and legal services organizations. Depending upon the structure of the See also Washington Comment [11]. organization, the entire organization or different components Firm of it may [2] Whether two or more lawyers constitute a firm within constitute a firm or firms for purposes of these Rules. paragraph (c) can depend on the specific facts. For example, two See also Washington Comment [12]. practitioners who share office space and occasionally consult or assist each other Fraud ordinarily would [5] When used in these Rules, the terms "fraud" or not be regarded as constituting a firm. However, if they "fraudulent" refer to present themselves conduct that is characterized as such under the substantive to the public in a way that suggests that they are a firm or or procedural conduct law of the applicable jurisdiction and has a purpose to themselves as a firm, they should be regarded as a firm for deceive. This does purposes of the not include merely negligent misrepresentation or negligent Rules. The terms of any formal agreement between failure to associated lawyers are apprise another of relevant information. For purposes of relevant in determining whether they are a firm, as is the fact these Rules, it is that they not necessary that anyone has suffered damages or relied on have mutual access to information concerning the clients the they serve. misrepresentation or failure to inform. Furthermore, it is relevant in doubtful cases to consider the underlying See also Washington Comment [13]. purpose of the Rule that is involved. A group of lawyers could be regarded Informed Consent as a firm for purposes of the Rule that the same lawyer [6] Many of the Rules of Professional Conduct require the should not lawyer to represent opposing parties in litigation, while it might not be obtain the informed consent of a client or other person (e.g., so regarded a former for purposes of the Rule that information acquired by one client or, under certain circumstances, a prospective client) lawyer is before attributed to another. accepting or continuing representation or pursuing a course of conduct.

c:strait/cle/18th Annual ‘Annual Adv. Conf on Commercial Real Estate Leases. 12.15.06.doc Page 15 See, e.g., Rules 1.2(c), 1.6(a) and 1.7(b). The communication may be inferred, however, from the conduct of a client or necessary to other person who obtain such consent will vary according to the Rule involved has reasonably adequate information about the matter. A and the number of Rules circumstances giving rise to the need to obtain informed require that a person's consent be confirmed in writing. See consent. The Rules 1.7(b) lawyer must make reasonable efforts to ensure that the client and 1.9(a). For a definition of "writing" and "confirmed in or other writing," see person possesses information reasonably adequate to make paragraphs (n) and (b). Rule 1.8(a) requires that a client's an informed consent be decision. Ordinarily, this will require communication that obtained in a writing signed by the client. See also Rule 1.5(c) includes a (1) disclosure of the facts and circumstances giving rise to the (requiring that a contingent fee agreement be "in a writing situation, any signed by the explanation reasonably necessary to inform the client or client"). For a definition of "signed," see paragraph (n). other person of the material advantages and disadvantages of the proposed See also Washington Comment [14]. course of conduct and a discussion of the client's or other person's options and Screened alternatives. In some circumstances it may be appropriate for [8] [Washington revision] This definition applies to situations a lawyer to where advise a client or other person to seek the advice of other screening of a personally disqualified lawyer is permitted to counsel. A remove lawyer need not inform a client or other person of facts or imputation of a conflict of interest under Rules 1.10, 1.11, implications 1.12, 1.18, or 6.5. already known to the client or other person; nevertheless, a lawyer who [9] The purpose of screening is to assure the affected does not personally inform the client or other person parties that assumes the risk that confidential information known by the personally disqualified the client or other person is inadequately informed and the lawyer consent is remains protected. The personally disqualified lawyer should invalid. In determining whether the information and acknowledge explanation provided the obligation not to communicate with any of the other are reasonably adequate, relevant factors include whether lawyers in the firm the client or with respect to the matter. Similarly, other lawyers in the firm other person is experienced in legal matters generally and in who are making working on the matter should be informed that the screening decisions of the type involved, and whether the client or is in place and other person is that they may not communicate with the personally independently represented by other counsel in giving the disqualified lawyer with consent. Normally, respect to the matter. Additional screening measures that are such persons need less information and explanation than appropriate others, and for the particular matter will depend on the circumstances. To generally a client or other person who is independently implement, represented by reinforce and remind all affected lawyers of the presence of other counsel in giving the consent should be assumed to the screening, have given informed consent. it may be appropriate for the firm to undertake such procedures as a [7] [Washington revision] Obtaining informed consent will written undertaking by the screened lawyer to avoid any usually require communication with an affirmative response by the client or other person. In other firm personnel and any contact with any firm files or general, a lawyer other materials may not assume consent from a client's or other person's relating to the matter, written notice and instructions to all silence. Consent other firm

c:strait/cle/18th Annual ‘Annual Adv. Conf on Commercial Real Estate Leases. 12.15.06.doc Page 16 personnel forbidding any communication with the screened Other lawyer relating to [16] For the scope of the phrase "information relating to the the matter, denial of access by the screened lawyer to firm representation of a client," which is not defined in Rule 1.0, files or other see Comment [19] to Rule 1.6. materials relating to the matter and periodic reminders of the screen to [Amended effective September 1, 2006.] the screened lawyer and all other firm personnel.

[10] In order to be effective, screening measures must be RPC RULE 1.2: SCOPE OF implemented as REPRESENTATION AND soon as practical after a lawyer or law firm knows or reasonably should ALLOCATION OF AUTHORITY know that there is a need for screening. BETWEEN CLIENT AND LAWYER See also Washington Comment [15]. (a) Subject to paragraphs (c) and (d), a lawyer shall abide by Additional Washington Comments (11 ? 16) a client's decisions concerning the objectives of representation Confirmed in Writing and, [11] Informed consent requires that the writing be as required by Rule 1.4, shall consult with the client as to the articulated in a means by which they are to be pursued. A lawyer may take manner that can be easily understood by the client. such action on behalf of the client as is impliedly authorized to carry out Firm the [12] Although the definition of "firm" or "law firm" in Rule representation. A lawyer shall abide by a client's decision 1.0(c) whether differs from the definition set forth in the Terminology section to settle a matter. In a criminal case, the lawyer shall abide of by the Washington's former Rules of Professional Conduct, there is client's decision, after consultation with the lawyer, as to a no intent to plea change the scope of the definition or to alter existing to be entered, whether to waive jury trial and whether the Washington law on client the application of the Rules of Professional Conduct to will testify. lawyers in a government office. (b) A lawyer's representation of a client, including representation Fraud by appointment, does not constitute an endorsement of the [13] Model Rule 1.0(d) was modified to clarify that the terms client's "fraud" and political, economic, social or moral views or activities. "fraudulent" in the Rules of Professional Conduct do not include an element (c) A lawyer may limit the scope of the representation if the of damage or reliance. limitation is reasonable under the circumstances and the client gives informed consent. Informed Consent [14] In order for the communication to the client to be (d) A lawyer shall not counsel a client to engage, or assist a adequate it must client, in conduct that the lawyer knows is criminal or be accomplished in a manner that can be easily understood fraudulent, by the client. but a lawyer may discuss the legal consequences of any proposed Screened course of conduct with a client and may counsel or assist a [15] See Rules 1.10 and 6.5 for specific screening client to requirements under the make a good faith effort to determine the validity, scope, circumstances covered by those Rules. meaning or application of the law. c:strait/cle/18th Annual ‘Annual Adv. Conf on Commercial Real Estate Leases. 12.15.06.doc Page 17 Comment resolve the disagreement by discharging the lawyer. See Rule 1.16(a)(3). Allocation of Authority between Client and Lawyer [3] At the outset of a representation, the client may [1] Paragraph (a) confers upon the client the ultimate authorize authority the lawyer to take specific action on the client's behalf to determine the purposes to be served by legal without representation, further consultation. Absent a material change in within the limits imposed by law and the lawyer's professional circumstances and obligations. The decisions specified in paragraph (a), such as subject to Rule 1.4, a lawyer may rely on such an advance whether to settle a civil matter, must also be made by the authorization. The client may, however, revoke such authority client. at any time. See Rule 1.4(a)(1) for the lawyer's duty to communicate with the [4] In a case in which the client appears to be suffering client about such decisions. With respect to the means by diminished capacity, the lawyer's duty to abide by the client's which the decisions is to be guided by reference to Rule 1.14. client's objectives are to be pursued, the lawyer shall consult with Independence from Client's Views or Activities the client as required by Rule 1.4(a)(2) and may take such action as [5] Legal representation should not be denied to people who is impliedly authorized to carry out the representation. are unable to afford legal services, or whose cause is [2] On occasion, however, a lawyer and a client may controversial or disagree about the subject of popular disapproval. By the same token, the means to be used to accomplish the client's objectives. representing a Clients client does not constitute approval of the client's views or normally defer to the special knowledge and skill of their activities. lawyer with respect to the means to be used to accomplish their Agreements Limiting Scope of Representation objectives, particularly with respect to technical, legal and tactical [6] The scope of services to be provided by a lawyer may be matters. limited by agreement with the client or by the terms under Conversely, lawyers usually defer to the client regarding such which the questions as the expense to be incurred and concern for third lawyer's services are made available to the client. When a persons lawyer has who might be adversely affected. Because of the varied been retained by an insurer to represent an insured, for nature of the example, the matters about which a lawyer and client might disagree and representation may be limited to matters related to the because insurance the actions in question may implicate the interests of a coverage. A limited representation may be appropriate tribunal or because the other persons, this Rule does not prescribe how such client has limited objectives for the representation. In disagreements addition, are to be resolved. Other law, however, may be applicable the terms upon which representation is undertaken may and should exclude be consulted by the lawyer. The lawyer should also consult specific means that might otherwise be used to accomplish with the the client and seek a mutually acceptable resolution of the client's objectives. Such limitations may exclude actions that disagreement. the If such efforts are unavailing and the lawyer has a client thinks are too costly or that the lawyer regards as fundamental repugnant disagreement with the client, the lawyer may withdraw from or imprudent. the representation. See Rule 1.16(b)(4). Conversely, the client [7] Although this Rule affords the lawyer and client may substantial c:strait/cle/18th Annual ‘Annual Adv. Conf on Commercial Real Estate Leases. 12.15.06.doc Page 18 latitude to limit the representation, the limitation must be drafting or delivering documents that the lawyer knows are reasonable under the circumstances. If, for example, a fraudulent client's or by suggesting how the wrongdoing might be concealed. A objective is limited to securing general information about the lawyer may law not continue assisting a client in conduct that the lawyer the client needs in order to handle a common and typically originally uncomplicated legal problem, the lawyer and client may supposed was legally proper but then discovers is criminal or agree that the fraudulent. The lawyer must, therefore, withdraw from the lawyer's services will be limited to a brief telephone representation of the client in the matter. See Rule 1.16(a). In consultation. some Such a limitation, however, would not be reasonable if the cases, withdrawal alone might be insufficient. It may be time necessary allotted was not sufficient to yield advice upon which the for the lawyer to give notice of the fact of withdrawal and to client disaffirm any opinion, document, affirmation or the like. See could rely. Although an agreement for a limited Rule 4.1. representation does not exempt a lawyer from the duty to provide competent [11] Where the client is a fiduciary, the lawyer may be representation, the limitation is a factor to be considered charged when with special obligations in dealings with a beneficiary. determining the legal knowledge, skill, thoroughness and preparation [12] Paragraph (d) applies whether or not the defrauded reasonably necessary for the representation. See Rule 1.1. party is a party to the transaction. Hence, a lawyer must not participate [8] All agreements concerning a lawyer's representation of a in a client must accord with the Rules of Professional Conduct and transaction to effectuate criminal or fraudulent avoidance of other tax law. See, e.g., Rules 1.1, 1.8 and 5.6. liability. Paragraph (d) does not preclude undertaking a criminal See also Washington Comment [14]. defense incident to a general retainer for legal services to a lawful Criminal, Fraudulent and Prohibited Transactions enterprise. The last clause of paragraph (d) recognizes that determining the validity or interpretation of a statute or [9] Paragraph (d) prohibits a lawyer from knowingly regulation counseling or may require a course of action involving disobedience of the assisting a client to commit a crime or fraud. This prohibition, statute however, does not preclude the lawyer from giving an honest or regulation or of the interpretation placed upon it by opinion governmental about the actual consequences that appear likely to result authorities. from a client's conduct. Nor does the fact that a client uses advice in [13] If a lawyer comes to know or reasonably should know a that a course of action that is criminal or fraudulent of itself make a client expects assistance not permitted by the Rules of lawyer a party to the course of action. There is a critical Professional distinction between presenting an analysis of legal aspects of Conduct or other law or if the lawyer intends to act contrary questionable conduct and recommending the means by to the which a crime or client's instructions, the lawyer must consult with the client fraud might be committed with impunity. regarding the limitations on the lawyer's conduct. See Rule 1.4(a)(5). [10] When the client's course of action has already begun and is Additional Washington Comment (14) continuing, the lawyer's responsibility is especially delicate. The Agreements Limiting Scope of Representation lawyer is required to avoid assisting the client, for example, by [14] An agreement limiting the scope of a representation shall c:strait/cle/18th Annual ‘Annual Adv. Conf on Commercial Real Estate Leases. 12.15.06.doc Page 19 consider the applicability of Rule 4.2 to the representation. including whether the fee agreement or confirming writing (The demonstrates provisions of this Comment were taken from former that the client had received a reasonable and fair disclosure Washington RPC of material 1.2(c).) See also Comment [11] to Rule 4.2 for specific elements of the fee agreement and of the lawyer's billing considerations pertaining to contact with an otherwise practices. represented person to whom limited representation is being or has been (b) The scope of the representation and the basis or rate of provided. the fee and expenses for which the client will be responsible shall be communicated to [Amended effective September 1, 2006.] the client, preferably in writing, before or within a reasonable time after commencing the representation except when the lawyer will charge a regularly represented client on the same basis or rate. Any RPC RULE 1.5: FEES changes in the basis or rate of the fee or expenses shall also be communicated to the (a) A lawyer shall not make an agreement for, charge, or client. Upon the request of the client in any matter, the collect an lawyer shall unreasonable fee or an unreasonable amount for expenses. communicate to the client in writing the basis or rate of the The factors to fee. be considered in determining the reasonableness of a fee include the following: (c) A fee may be contingent on the outcome of the matter for which the (1) the time and labor required, the novelty and difficulty service is rendered, except in a matter in which a contingent of the fee is questions involved, and the skill requisite to perform the legal prohibited by paragraph (d) or other law. If a fee is contingent service properly; on the outcome of a matter, a lawyer shall comply with the following (2) the likelihood, if apparent to the client, that the acceptance of (1) A contingent fee agreement shall be in a writing and the particular employment will preclude other employment signed by the client; by the lawyer; (2) A contingent fee agreement shall state the method by (3) the fee customarily charged in the locality for similar which the legal services; fee is to be determined, including the percentage or percentages that (4) the amount involved and the results obtained; shall accrue to the lawyer in the event of settlement, trial or appeal; (5) the time limitations imposed by the client or by the litigation and other expenses to be deducted from the circumstances; recovery; and whether such expenses are to be deducted before or after (6) the nature and length of the professional relationship the contingent with the client; fee is calculated. The agreement must clearly notify the client of any (7) the experience, reputation, and ability of the lawyer or expenses for which the client will be liable, whether or not lawyers the client is performing the services; the prevailing party;

(8) whether the fee is fixed or contingent; and (3) Upon conclusion of a contingent fee matter, the lawyer shall (9) the terms of the fee agreement between the lawyer provide the client with a written statement stating the and the client, outcome of the c:strait/cle/18th Annual ‘Annual Adv. Conf on Commercial Real Estate Leases. 12.15.06.doc Page 20 matter and, if there is a recovery, showing the remittance to [1] Paragraph (a) requires that lawyers charge fees that are the client reasonable and the method of its determination; and under the circumstances. The factors specified in (1) through (9) are not (4) A contingent fee consisting of a percentage of the exclusive. Nor will each factor be relevant in each instance. monetary Paragraph amount recovered for a claimant, in which all or part of the (a) also requires that expenses for which the client will be recovery is charged must to be paid in the future, shall be paid only be reasonable. A lawyer may seek reimbursement for the cost of services (i) by applying the percentage to the amounts recovered performed in-house, such as copying, or for other expenses as they incurred in- are received by the client; or house, such as telephone charges, either by charging a reasonable amount (ii) by applying the percentage to the actual cost of the to which the client has agreed in advance or by charging an settlement or award to the defendant. amount that reasonably reflects the cost incurred by the lawyer. (d) A lawyer shall not enter into an arrangement for, charge, or collect: See also Washington Comments [10] and [11].

(1) any fee in a domestic relations matter, the payment or Basis or Rate of Fee amount of [2] When the lawyer has regularly represented a client, they which is contingent upon the securing of a dissolution or ordinarily annulment of will have evolved an understanding concerning the basis or marriage or upon the amount of maintenance or support, or rate of the fee property and the expenses for which the client will be responsible. In a settlement in lieu thereof; or new client- lawyer relationship, however, an understanding as to fees (2) a contingent fee for representing a defendant in a and expenses criminal case. must be promptly established. Generally, it is desirable to furnish the (e) A division of a fee between lawyers who are not in the client with at least a simple memorandum or copy of the same firm may lawyer's customary be made only if: fee arrangements that states the general nature of the legal services to (1) (i) the division is in proportion to the services provided be provided, the basis, rate or total amount of the fee and by whether and to each lawyer or each lawyer assumes joint responsibility for what extent the client will be responsible for any costs, the representation; expenses or disbursements in the course of the representation. A written (ii) the client agrees to the arrangement, including the statement share each concerning the terms of the engagement reduces the lawyer will receive, and the agreement is confirmed in possibility of misunderstanding. writing; and [3] [Reserved in part.] Contingent fees, like any other fees, (iii) the total fee is reasonable; or are subject to the reasonableness standard of paragraph (a) of (2) the division is between the lawyer and a duly this Rule. In authorized lawyer determining whether a particular contingent fee is referral service of either the Washington State Bar reasonable, or whether Association or of one it is reasonable to charge any form of contingent fee, a of the county bar associations of this state. lawyer must consider the factors that are relevant under the Comment circumstances. Reasonableness of Fee and Expenses c:strait/cle/18th Annual ‘Annual Adv. Conf on Commercial Real Estate Leases. 12.15.06.doc Page 21 Terms of Payment such contracts do not implicate the same policy concerns. [4] A lawyer may require advance payment of a fee, but is obliged to Division of Fee return any unearned portion. See Rule 1.16(d). A lawyer may [7] A division of fee is a single billing to a client covering the accept fee property in payment for services, such as an ownership of two or more lawyers who are not in the same firm. A interest in an division of fee enterprise, providing this does not involve acquisition of a facilitates association of more than one lawyer in a matter in proprietary which interest in the cause of action or subject matter of the neither alone could serve the client as well, and most often is litigation used when contrary to Rule 1.8 (i). However, a fee paid in property the fee is contingent and the division is between a referring instead of money lawyer and a may be subject to the requirements of Rule 1.8(a) because trial specialist. Paragraph (e) permits the lawyers to divide a such fees often fee either have the essential qualities of a business transaction with the on the basis of the proportion of services they render or if client. each lawyer assumes responsibility for the representation as a whole. In [5] An agreement may not be made whose terms might addition, the induce the lawyer client must agree to the arrangement, including the share improperly to curtail services for the client or perform them in that each lawyer a way is to receive, and the agreement must be confirmed in contrary to the client's interest. For example, a lawyer should writing. Contingent not enter fee agreements must be in a writing signed by the client and into an agreement whereby services are to be provided only must up to a stated otherwise comply with paragraph (c) of this Rule. Joint amount when it is foreseeable that more extensive services responsibility for probably will the representation entails financial and ethical responsibility be required, unless the situation is adequately explained to for the the client. representation as if the lawyers were associated in a Otherwise, the client might have to bargain for further partnership. A assistance in the lawyer should only refer a matter to a lawyer whom the midst of a proceeding or transaction. However, it is proper to referring lawyer define the reasonably believes is competent to handle the matter. See extent of services in light of the client's ability to pay. A Rule 1.1. lawyer should not exploit a fee arrangement based primarily on [8] Paragraph (e) does not prohibit or regulate division of hourly charges by fees to be using wasteful procedures. received in the future for work done when lawyers were previously Prohibited Contingent Fees associated in a law firm. [6] [Washington revision] Paragraph (d) prohibits a lawyer from Disputes over Fees charging a contingent fee in a domestic relations matter [9] If a procedure has been established for resolution of fee when payment is disputes, contingent upon the securing of a dissolution or annulment of such as an arbitration or mediation procedure established by marriage or the bar, the upon the amount of maintenance or support or property lawyer must comply with the procedure when it is mandatory, settlement to be and, even when it is voluntary, the lawyer should obtained. This provision does not preclude a contract for a conscientiously consider submitting to contingent fee it. Law may prescribe a procedure for determining a lawyer's for legal representation in connection with the recovery of fee, for post-judgment example, in representation of an executor or administrator, a balances due under support, maintenance or other financial class or a orders because c:strait/cle/18th Annual ‘Annual Adv. Conf on Commercial Real Estate Leases. 12.15.06.doc Page 22 person entitled to a reasonable fee as part of the measure of damages. The (3) may reveal information relating to the representation of lawyer entitled to such a fee and a lawyer representing a client another party to prevent, mitigate or rectify substantial injury to the concerned with the fee should comply with the prescribed financial procedure. interests or property of another that is reasonably certain to result or Additional Washington Comments (10 ? 11) has resulted from the client's commission of a crime or fraud in Reasonableness of Fee and Expenses furtherance of which the client has used the lawyer's [10] Every fee agreed to, charged, or collected, including a services; fee denominated as "nonrefundable" or "earned upon receipt," is (4) may reveal information relating to the representation of subject to a client Rule 1.5(a) and may not be unreasonable. to secure legal advice about the lawyer's compliance with these Rules; [11] Under paragraph (a)(9), one factor in determining whether a fee is (5) may reveal information relating to the representation of reasonable is whether the fee agreement or confirming a client writing demonstrates to establish a claim or defense on behalf of the lawyer in a that the client received a reasonable and fair disclosure of controversy material between the lawyer and the client, to establish a defense to a elements of the fee agreement. Lawyers are encouraged to criminal use written fee charge or civil claim against the lawyer based upon conduct agreements that fully and fairly disclose all material terms in in which the a manner client was involved, or to respond to allegations in any easily understood by the client. proceeding concerning the lawyer's representation of the client; [Amended effective September 1, 2006.] (6) may reveal information relating to the representation of a client RPC RULE 1.6 to comply with a court order; or CONFIDENTIALITY OF (7) may reveal information relating to the representation of INFORMATION a client to inform a tribunal about any breach of fiduciary (a) A lawyer shall not reveal information relating to the responsibility when the representation client is serving as a court appointed fiduciary such as a of a client unless the client gives informed consent, the guardian, disclosure is personal representative, or receiver. impliedly authorized in order to carry out the representation or the disclosure is permitted by paragraph (b). Comment See also Washington Comment [19]. (b) A lawyer to the extent the lawyer reasonably believes necessary: [1] [Washington revision] This Rule governs the disclosure by a lawyer (1) shall reveal information relating to the representation of of information relating to the representation of a client. See a client Rule 1.18 to prevent reasonably certain death or substantial bodily for the lawyer's duties with respect to information provided to harm; the lawyer by a prospective client, Rule 1.9(c)(2) for the lawyer's duty (2) may reveal information relating to the representation of not to reveal a client information relating to the lawyer's prior representation of a to prevent the client from committing a crime; former c:strait/cle/18th Annual ‘Annual Adv. Conf on Commercial Real Estate Leases. 12.15.06.doc Page 23 client and Rules 1.8(b) and 1.9(c)(1) for the lawyer's duties Conduct or other law. See also Scope. with respect to the use of such information to the disadvantage of clients [4] Paragraph (a) prohibits a lawyer from revealing and former clients. information relating to the representation of a client. This prohibition also applies [2] A fundamental principle in the client-lawyer relationship to is that, disclosures by a lawyer that do not in themselves reveal in the absence of the client's informed consent, the lawyer protected must not reveal information but could reasonably lead to the discovery of information relating to the representation. See Rule 1.0(e) for such information the by a third person. A lawyer's use of a hypothetical to discuss definition of informed consent. This contributes to the trust issues that is the relating to the representation is permissible so long as there hallmark of the client-lawyer relationship. The client is is no thereby reasonable likelihood that the listener will be able to encouraged to seek legal assistance and to communicate ascertain the fully and frankly identity of the client or the situation involved. with the lawyer even as to embarrassing or legally damaging subject matter. Authorized Disclosure The lawyer needs this information to represent the client effectively and, [5] Except to the extent that the client's instructions or if necessary, to advise the client to refrain from wrongful special conduct. Almost circumstances limit that authority, a lawyer is impliedly without exception, clients come to lawyers in order to authorized to determine their make disclosures about a client when appropriate in carrying rights and what is, in the complex of laws and regulations, out the deemed to be representation. In some situations, for example, a lawyer legal and correct. Based upon experience, lawyers know that may be impliedly almost all authorized to admit a fact that cannot properly be disputed clients follow the advice given, and the law is upheld. or to make a disclosure that facilitates a satisfactory conclusion to a [3] The principle of client-lawyer confidentiality is given matter. Lawyers effect by in a firm may, in the course of the firm's practice, disclose to related bodies of law: the attorney-client privilege, the work each other product information relating to a client of the firm, unless the client doctrine and the rule of confidentiality established in has professional instructed that particular information be confined to specified ethics. The attorney-client privilege and work-product lawyers. doctrine apply in judicial and other proceedings in which a lawyer may be Disclosure Adverse to Client called as a witness or otherwise required to produce evidence concerning a [6] [Washington revision] Although the public interest is client. The rule of usually best client-lawyer confidentiality applies in situations other than served by a strict rule requiring lawyers to preserve the those where confidentiality evidence is sought from the lawyer through compulsion of of information relating to the representation of their clients, law. The the confidentiality rule, for example, applies not only to matters confidentiality rule is subject to limited exceptions. Paragraph communicated (b)(1) in confidence by the client but also to all information relating recognizes the overriding value of life and physical integrity to the and requires representation, whatever its source. A lawyer may not disclosure reasonably necessary to prevent reasonably disclose such certain death or information except as authorized or required by the Rules of substantial bodily harm. Such harm is reasonably certain to Professional occur if it c:strait/cle/18th Annual ‘Annual Adv. Conf on Commercial Real Estate Leases. 12.15.06.doc Page 24 will be suffered imminently or if there is a present and such complicity has been made. Paragraph (b)(5) does not substantial threat require the lawyer that a person will suffer such harm at a later date if the to await the commencement of an action or proceeding that lawyer fails to charges such take action necessary to eliminate the threat. Thus, a lawyer complicity, so that the defense may be established by who knows responding directly that a client has accidentally discharged toxic waste into a to a third party who has made such an assertion. The right to town's water defend also supply must reveal this information to the authorities if there applies, of course, where a proceeding has been commenced. is a present and substantial risk that a person who drinks the [11] A lawyer entitled to a fee is permitted by paragraph (b) water will (5) to prove contract a life-threatening or debilitating disease and the the services rendered in an action to collect it. This aspect of lawyer's the Rule disclosure is necessary to eliminate the threat or reduce the expresses the principle that the beneficiary of a fiduciary number of victims. relationship may not exploit it to the detriment of the fiduciary. [7] [Reserved.] [12] [Reserved.] [8] [Reserved.] [13] [Washington revision] A lawyer may be ordered to [9] A lawyer's confidentiality obligations do not preclude a reveal information lawyer from relating to the representation of a client by a court. Absent securing confidential legal advice about the lawyer's personal informed responsibility to comply with these Rules. In most situations, consent of the client to do otherwise, the lawyer should disclosing assert on behalf information to secure such advice will be impliedly authorized of the client all nonfrivolous claims that the information for the sought is lawyer to carry out the representation. Even when the protected against disclosure by the attorney-client privilege disclosure is not or other impliedly authorized, paragraph (b)(4) permits such applicable law. In the event of an adverse ruling, the lawyer disclosure because of must consult the importance of a lawyer's compliance with the Rules of with the client about the possibility of appeal to the extent Professional Conduct. required by Rule 1.4. Unless review is sought, however, paragraph (b)(6) [10] Where a legal claim or disciplinary charge alleges permits the complicity of the lawyer to comply with the court's order. lawyer in a client's conduct or other misconduct of the lawyer involving See also Washington Comment [24]. representation of the client, the lawyer may respond to the extent the [14] Paragraph (b) permits disclosure only to the extent the lawyer reasonably believes necessary to establish a defense. lawyer The same is reasonably believes the disclosure is necessary to accomplish true with respect to a claim involving the conduct or one of the representation of a purposes specified. Where practicable, the lawyer should first former client. Such a charge can arise in a civil, criminal, seek to disciplinary persuade the client to take suitable action to obviate the or other proceeding and can be based on a wrong allegedly need for committed by the disclosure. In any case, a disclosure adverse to the client's lawyer against the client or on a wrong alleged by a third interest person, for should be no greater than the lawyer reasonably believes example, a person claiming to have been defrauded by the necessary to lawyer and client accomplish the purpose. If the disclosure will be made in acting together. The lawyer's right to respond arises when an connection with a assertion of c:strait/cle/18th Annual ‘Annual Adv. Conf on Commercial Real Estate Leases. 12.15.06.doc Page 25 judicial proceeding, the disclosure should be made in a use special security measures if the method of manner that limits communication affords a access to the information to the tribunal or other persons reasonable expectation of privacy. Special circumstances, having a need to however, may know it and appropriate protective orders or other warrant special precautions. Factors to be considered in arrangements should be determining the sought by the lawyer to the fullest extent practicable. reasonableness of the lawyer's expectation of confidentiality include the [15] [Washington revision] Paragraphs (b)(2) through (b)(7) sensitivity of the information and the extent to which the permit but do privacy of the not require the disclosure of information relating to a client's communication is protected by law or by a confidentiality representation to accomplish the purposes specified in those agreement. A paragraphs. In client may require the lawyer to implement special security exercising the discretion conferred by those paragraphs, the measures not lawyer may required by this Rule or may give informed consent to the use consider such factors as the nature of the lawyer's of a means of relationship with the communication that would otherwise be prohibited by this client and with those who might be injured by the client, the Rule. lawyer's own involvement in the transaction and factors that may Former Client extenuate the conduct in question. A lawyer's decision not to disclose as permitted [18] The duty of confidentiality continues after the client- by paragraph lawyer (b) does not violate this Rule. Disclosure may be required, relationship has terminated. See Rule 1.9(c)(2). See Rule however, by 1.9(c)(1) for the other Rules. Some Rules require disclosure only if such prohibition against using such information to the disclosure would be disadvantage of the permitted by paragraph (b). See Rules 1.2(d), 3.3, 4.1(b), and former client. 8.1. See also Rule 1.13(c), which permits disclosure in some Additional Washington Comments (19 ? 26) circumstances whether or not Rule 1.6 permits the disclosure. [19] The phrase "information relating to the representation" should be See also Washington Comment [23]. interpreted broadly. The "information" protected by this Rule includes, but Acting Competently to Preserve Confidentiality is not necessarily limited to, confidences and secrets. "Confidence" refers [16] A lawyer must act competently to safeguard to information protected by the attorney client privilege information relating to under applicable the representation of a client against inadvertent or law, and "secret" refers to other information gained in the unauthorized professional disclosure by the lawyer or other persons who are relationship that the client has requested be held inviolate or participating in the the representation of the client or who are subject to the lawyer's disclosure of which would be embarrassing or would be likely supervision. See Rules 1.1, 5.1 and 5.3. to be detrimental to the client. [17] When transmitting a communication that includes information relating Disclosure Adverse to Client to the representation of a client, the lawyer must take reasonable [20] Washington's Rule 1.6(b)(2), which authorizes precautions to prevent the information from coming into the disclosure to prevent hands of a client from committing a crime, is significantly broader than unintended recipients. This duty, however, does not require the that the lawyer corresponding exception in the Model Rule. While the Model Rule permits a c:strait/cle/18th Annual ‘Annual Adv. Conf on Commercial Real Estate Leases. 12.15.06.doc Page 26 lawyer to reveal information relating to the representation to judicial resolution of such issues that necessitates the prevent the omission of "other client from "committing a crime . . . that is reasonably certain law" from this Rule. to result in substantial injury to the financial interests or property of Withdrawal another and in furtherance of which the client has used the lawyer's [25] After withdrawal the lawyer is required to refrain from services," disclosing Washington's Rule permits the lawyer to reveal such the client's confidences, except as otherwise permitted by information to prevent Rules 1.6 or the commission of any crime. 1.9. A lawyer is not prohibited from giving notice of the fact of [21] [Reserved.] withdrawal by this Rule, Rule 1.8(b), or Rule 1.9(c). If the lawyer's [22] [Reserved.] services will be used by the client in furthering a course of criminal or [23] The exceptions to the general rule prohibiting fraudulent conduct, the lawyer must withdraw. See Rule unauthorized 1.16(a)(1). Upon disclosure of information relating to the representation withdrawal from the representation in such circumstances, "should not be the lawyer may carelessly invoked." In re Boelter, 139 Wn.2d 81, 91, 985 P.2d also disaffirm or withdraw any opinion, document, 328 (1999). affirmation, or the like. A lawyer must make every effort practicable to avoid If the client is an organization, the lawyer may be in doubt unnecessary disclosure about whether of information relating to a representation, to limit disclosure contemplated conduct will actually be carried out by the to those organization. When having the need to know it, and to obtain protective orders or a lawyer requires guidance about compliance with this Rule make other in connection arrangements minimizing the risk of avoidable disclosure. with an organizational client, the lawyer may proceed under the provisions [24] Washington has not adopted that portion of Model Rule of Rule 1.13(b). 1.6(b)(6) permitting a lawyer to reveal information related to the Other representation to comply with "other law." Washington's omission of this [26] This Rule does not relieve a lawyer of his or her phrase arises from a obligations under concern that it would authorize the lawyer to decide whether Rule 5.4(b) of the Rules for Enforcement of Lawyer Conduct. a disclosure is required by "other law," even though the right to [Amended effective September 1, 2006.] confidentiality and the right to waive confidentiality belong to the client. The decision to RPC RULE 1.7: CONFLICT OF waive confidentiality should only be made by a fully informed INTEREST; CURRENT CLIENTS client after consultation with the client's lawyer or by a court of (a) Except as provided in paragraph (b), a lawyer shall not competent represent a jurisdiction. Limiting the exception to compliance with a court client if the representation involves a concurrent conflict of order interest. A protects the client's interest in maintaining confidentiality concurrent conflict of interest exists if: while insuring that any determination about the legal necessity of (1) the representation of one client will be directly adverse revealing to confidential information will be made by a court. It is the another client; or need for a

c:strait/cle/18th Annual ‘Annual Adv. Conf on Commercial Real Estate Leases. 12.15.06.doc Page 27 (2) there is a significant risk that the representation of one may be undertaken despite the existence of a conflict, i.e., or more whether the clients will be materially limited by the lawyer's conflict is consentable; and 4) if so, consult with the clients responsibilities to affected another client, a former client or a third person or by a under paragraph (a) and obtain their informed consent, personal interest confirmed in of the lawyer. writing. The clients affected under paragraph (a) include both of the (b) Notwithstanding the existence of a concurrent conflict of clients referred to in paragraph (a)(1) and the one or more interest clients whose under paragraph (a), a lawyer may represent a client if: representation might be materially limited under paragraph (a)(2). (1) the lawyer reasonably believes that the lawyer will be able to [3] A conflict of interest may exist before representation is provide competent and diligent representation to each undertaken, affected client; in which event the representation must be declined, unless the lawyer (2) the representation is not prohibited by law; obtains the informed consent of each client under the conditions of (3) the representation does not involve the assertion of a paragraph (b). To determine whether a conflict of interest claim by exists, a lawyer one client against another client represented by the lawyer in should adopt reasonable procedures, appropriate for the size the same and type of litigation or other proceeding before a tribunal; and firm and practice, to determine in both litigation and non- litigation (4) each affected client gives informed consent, confirmed matters the persons and issues involved. See also Comment in writing to Rule 5.1. (following authorization from the other client to make any Ignorance caused by a failure to institute such procedures required disclosures). will not excuse a lawyer's violation of this Rule. As to whether a client-lawyer Comment relationship exists or, having once been established, is General Principles continuing, see [1] Loyalty and independent judgment are essential Comment to Rule 1.3 and Scope. elements in the lawyer's relationship to a client. Concurrent conflicts of [4] If a conflict arises after representation has been interest can undertaken, the arise from the lawyer's responsibilities to another client, a lawyer ordinarily must withdraw from the representation, former client unless the lawyer or a third person or from the lawyer's own interests. For has obtained the informed consent of the client under the specific Rules conditions of regarding certain concurrent conflicts of interest, see Rule paragraph (b). See Rule 1.16. Where more than one client is 1.8. For involved, former client conflicts of interest, see Rule 1.9. For conflicts whether the lawyer may continue to represent any of the of clients is interest involving prospective clients, see Rule 1.18. For determined both by the lawyer's ability to comply with duties definitions of owed to the "informed consent" and "confirmed in writing," see Rule former client and by the lawyer's ability to represent 1.0(e) and (b). adequately the remaining client or clients, given the lawyer's duties to the [2] Resolution of a conflict of interest problem under this former Rule requires client. See Rule 1.9. See also Comments [5] and [29]. the lawyer to: 1) clearly identify the client or clients; 2) determine [5] Unforeseeable developments, such as changes in whether a conflict of interest exists; 3) decide whether the corporate and other representation c:strait/cle/18th Annual ‘Annual Adv. Conf on Commercial Real Estate Leases. 12.15.06.doc Page 28 organizational affiliations or the addition or realignment of in unrelated matters of clients whose interests are only parties in economically litigation, might create conflicts in the midst of a adverse, such as representation of competing economic representation, as enterprises in when a company sued by the lawyer on behalf of one client is unrelated litigation, does not ordinarily constitute a conflict of bought by interest another client represented by the lawyer in an unrelated and thus may not require consent of the respective clients. matter. Depending on the circumstances, the lawyer may have the option to [7] Directly adverse conflicts can also arise in transactional withdraw from one matters. of the representations in order to avoid the conflict. The For example, if a lawyer is asked to represent the seller of a lawyer must seek business in court approval where necessary and take steps to minimize negotiations with a buyer represented by the lawyer, not in harm to the the same clients. See Rule 1.16. The lawyer must continue to protect transaction but in another, unrelated matter, the lawyer could the confidences not of the client from whose representation the lawyer has undertake the representation without the informed consent of withdrawn. each client. See Rule 1.9(c). See also Washington Comment [36]. Identifying Conflicts of Interest: Material Limitation [8] Even where there is no direct adverseness, a conflict of Identifying Conflicts of Interest: Directly Adverse interest [6] Loyalty to a current client prohibits undertaking exists if there is a significant risk that a lawyer's ability to representation consider, directly adverse to that client without that client's informed recommend or carry out an appropriate course of action for consent. the client will Thus, absent consent, a lawyer may not act as an advocate in be materially limited as a result of the lawyer's other one matter responsibilities or against a person the lawyer represents in some other matter, interests. For example, a lawyer asked to represent several even when the individuals matters are wholly unrelated. The client as to whom the seeking to form a joint venture is likely to be materially representation is limited in the directly adverse is likely to feel betrayed, and the resulting lawyer's ability to recommend or advocate all possible damage to positions that each the client-lawyer relationship is likely to impair the lawyer's might take because of the lawyer's duty of loyalty to the ability to others. The represent the client effectively. In addition, the client on conflict in effect forecloses alternatives that would otherwise whose behalf be the adverse representation is undertaken reasonably may available to the client. The mere possibility of subsequent fear that the harm does not lawyer will pursue that client's case less effectively out of itself require disclosure and consent. The critical questions deference to are the the other client, i.e., that the representation may be likelihood that a difference in interests will eventuate and, if materially limited it does, by the lawyer's interest in retaining the current client. whether it will materially interfere with the lawyer's Similarly, a independent directly adverse conflict may arise when a lawyer is required professional judgment in considering alternatives or foreclose to cross- courses of examine a client who appears as a witness in a lawsuit action that reasonably should be pursued on behalf of the involving another client. client, as when the testimony will be damaging to the client who is See also Washington Comment [37]. represented in the lawsuit. On the other hand, simultaneous representation Lawyer's Responsibilities to Former Clients and Other Third Persons c:strait/cle/18th Annual ‘Annual Adv. Conf on Commercial Real Estate Leases. 12.15.06.doc Page 29 [9] In addition to conflicts with other current clients, a the existence and implications of the relationship between lawyer's the lawyers duties of loyalty and independence may be materially limited before the lawyer agrees to undertake the representation. by Thus, a lawyer so responsibilities to former clients under Rule 1.9 or by the related to another lawyer ordinarily may not represent a lawyer's client in a matter responsibilities to other persons, such as fiduciary duties where that lawyer is representing another party, unless each arising from a client gives lawyer's service as a trustee, executor or corporate director. informed consent. The disqualification arising from such Personal Interest Conflicts relationships is [10] The lawyer's own interests should not be permitted to personal and ordinarily is not imputed to members of firms have an with whom the adverse effect on representation of a client. For example, if lawyers are associated. See Rules 1.8(k) and 1.10. the probity of a lawyer's own conduct in a transaction is in serious [12] [Reserved.] question, it may be difficult or impossible for the lawyer to give a client Interest of Person Paying for a Lawyer's Service detached advice. [13] A lawyer may be paid from a source other than the Similarly, when a lawyer has discussions concerning possible client, including employment a co-client, if the client is informed of that fact and consents with an opponent of the lawyer's client, or with a law firm and the representing arrangement does not compromise the lawyer's duty of the opponent, such discussions could materially limit the loyalty or independent judgment to the client. See Rule 1.8(f). lawyer's If acceptance of the payment from any other source presents representation of the client. In addition, a lawyer may not a significant risk that the lawyer's allow related representation of the client will be materially limited by the business interests to affect representation, for example, by lawyer's own referring interest in accommodating the person paying the lawyer's fee clients to an enterprise in which the lawyer has an or by the undisclosed financial lawyer's responsibilities to a payer who is also a co-client, interest. See Rule 1.8 for specific Rules pertaining to a then the number of lawyer must comply with the requirements of paragraph (b) personal interest conflicts, including business transactions before accepting with clients. the representation, including determining whether the See also Rule 1.10 (personal interest conflicts under Rule 1.7 conflict is ordinarily consentable and, if so, that the client has adequate are not imputed to other lawyers in a law firm). information about the material risks of the representation. [11] [Washington revision] When lawyers representing different clients in Prohibited Representations the same matter or in substantially related matters are [14] Ordinarily, clients may consent to representation related as parent, notwithstanding a child, sibling, or spouse, or if the lawyers have some other conflict. However, as indicated in paragraph (b), some close familial conflicts are relationship or if the lawyers are in a personal intimate nonconsentable, meaning that the lawyer involved cannot relationship with properly ask for one another, there may be a significant risk that client such agreement or provide representation on the basis of the confidences will client's be revealed and that the lawyer's family or other familial or consent. When the lawyer is representing more than one intimate client, the question relationship will interfere with both loyalty and independent of consentability must be resolved as to each client. professional judgment. See Rule 1.8(l). As a result, each client is entitled [15] Consentability is typically determined by considering to know of whether the

c:strait/cle/18th Annual ‘Annual Adv. Conf on Commercial Real Estate Leases. 12.15.06.doc Page 30 interests of the clients will be adequately protected if the [18] Informed consent requires that each affected client be clients are aware of the permitted to give their informed consent to representation relevant circumstances and of the material and reasonably burdened by a foreseeable ways conflict of interest. Thus, under paragraph (b)(1), that the conflict could have adverse effects on the interests representation is of that prohibited if in the circumstances the lawyer cannot client. See Rule 1.0(e) (informed consent). The information reasonably conclude required that the lawyer will be able to provide competent and diligent depends on the nature of the conflict and the nature of the representation. risks involved. When representation of multiple clients in a single matter is See Rule 1.1 (Competence) and Rule 1.3 (Diligence). undertaken, the information must include the implications of the common [16] [Washington revision] Paragraph (b)(2) describes representation, conflicts that are including possible effects on loyalty, confidentiality and the nonconsentable because the representation is prohibited by attorney- applicable law. client privilege and the advantages and risks involved. See For example, in some states substantive law provides that Comments [30] the same lawyer and [31] (effect of common representation on confidentiality). may not represent more than one defendant in a capital case, even with the [19] Under some circumstances it may be impossible to consent of the clients, and under federal criminal statutes make the disclosure certain necessary to obtain consent. For example, when the lawyer representations by a former government lawyer are represents prohibited, despite the different clients in related matters and one of the clients informed consent of the former client. In addition, decisional refuses to law in some consent to the disclosure necessary to permit the other client states other than Washington limits the ability of a to make an governmental client, informed decision, the lawyer cannot properly ask the latter such as a municipality, to consent to a conflict of interest. to consent. In See Washington Comment [38]. some cases the alternative to common representation can be that each party [17] Paragraph (b)(3) describes conflicts that are may have to obtain separate representation with the nonconsentable because possibility of of the institutional interest in vigorous development of each incurring additional costs. These costs, along with the client's benefits of position when the clients are aligned directly against each securing separate representation, are factors that may be other in the considered by the same litigation or other proceeding before a tribunal. affected client in determining whether common Whether clients are representation is in the aligned directly against each other within the meaning of this client's interests. paragraph See also Washington Comment [39]. requires examination of the context of the proceeding. Although this Consent Confirmed in Writing paragraph does not preclude a lawyer's multiple [20] Paragraph (b) requires the lawyer to obtain the representation of adverse informed consent of parties to a mediation (because mediation is not a the client, confirmed in writing. Such a writing may consist of proceeding before a a document "tribunal" under Rule 1.0(m)), such representation may be executed by the client or one that the lawyer promptly precluded by records and paragraph (b)(1). transmits to the client following an oral consent. See Rule 1.0(b). See See also Washington Comment [38]. also Rule 1.0(n) (writing includes electronic transmission). If it is not Informed Consent c:strait/cle/18th Annual ‘Annual Adv. Conf on Commercial Real Estate Leases. 12.15.06.doc Page 31 feasible to obtain or transmit the writing at the time the client party or the fact that there are substantially different gives possibilities of informed consent, then the lawyer must obtain or transmit it settlement of the claims or liabilities in question. Such within a conflicts can reasonable time thereafter. See Rule 1.0(b). The requirement arise in criminal cases as well as civil. The potential for of a writing conflict of does not supplant the need in most cases for the lawyer to interest in representing multiple defendants in a criminal talk with the case is so grave client, to explain the risks and advantages, if any, of that ordinarily a lawyer should decline to represent more representation than one burdened with a conflict of interest, as well as reasonably codefendant. On the other hand, common representation of available persons having alternatives, and to afford the client a reasonable opportunity similar interests in civil litigation is proper if the requirements to consider of the risks and alternatives and to raise questions and paragraph (b) are met. concerns. Rather, the writing is required in order to impress upon clients the [24] Ordinarily a lawyer may take inconsistent legal seriousness of the positions in decision the client is being asked to make and to avoid different tribunals at different times on behalf of different disputes or clients. The ambiguities that might later occur in the absence of a writing. mere fact that advocating a legal position on behalf of one client might Revoking Consent create precedent adverse to the interests of a client [21] A client who has given consent to a conflict may revoke represented by the the consent lawyer in an unrelated matter does not create a conflict of and, like any other client, may terminate the lawyer's interest. A representation at conflict of interest exists, however, if there is a significant risk any time. Whether revoking consent to the client's own that a representation lawyer's action on behalf of one client will materially limit the precludes the lawyer from continuing to represent other lawyer's clients depends on effectiveness in representing another client in a different the circumstances, including the nature of the conflict, case; for whether the client example, when a decision favoring one client will create a revoked consent because of a material change in precedent likely circumstances, the to seriously weaken the position taken on behalf of the other reasonable expectations of the other client and whether client. material detriment Factors relevant in determining whether the clients need to to the other clients or the lawyer would result. be advised of the risk include: where the cases are pending, whether the Consent to Future Conflict issue is [22] [Reserved.] substantive or procedural, the temporal relationship between Conflicts in Litigation the matters, [23] Paragraph (b)(3) prohibits representation of opposing the significance of the issue to the immediate and long-term parties in interests of the same litigation, regardless of the clients' consent. On the the clients involved and the clients' reasonable expectations other hand, in retaining simultaneous representation of parties whose interests in the lawyer. If there is significant risk of material limitation, litigation may then conflict, such as coplaintiffs or codefendants, is governed by absent informed consent of the affected clients, the lawyer paragraph must refuse one (a)(2). A conflict may exist by reason of substantial of the representations or withdraw from one or both matters. discrepancy in the parties' testimony, incompatibility in positions in relation to [25] When a lawyer represents or seeks to represent a class an opposing of

c:strait/cle/18th Annual ‘Annual Adv. Conf on Commercial Real Estate Leases. 12.15.06.doc Page 32 plaintiffs or defendants in a class-action lawsuit, unnamed interests are fundamentally antagonistic to each other, but members of the common class are ordinarily not considered to be clients of the lawyer representation is permissible where the clients are generally for aligned in purposes of applying paragraph (a)(1) of this Rule. Thus, the interest even though there is some difference in interest lawyer does among them. Thus, not typically need to get the consent of such a person before a lawyer may seek to establish or adjust a relationship representing between clients on a client suing the person in an unrelated matter. Similarly, a an amicable and mutually advantageous basis; for example, lawyer in helping to seeking to represent an opponent in a organize a business in which two or more clients are class action does not typically need the consent of an entrepreneurs, working unnamed member of out the financial reorganization of an enterprise in which two the class whom the lawyer represents in an unrelated matter. or more clients have an interest or arranging a property distribution in Nonlitigation Conflicts settlement [26] Conflicts of interest under paragraphs (a)(1) and (a)(2) of an estate. The lawyer seeks to resolve potentially adverse arise in interests by contexts other than litigation. For a discussion of directly developing the parties' mutual interests. Otherwise, each adverse party might have conflicts in transactional matters, see Comment [7]. Relevant to obtain separate representation, with the possibility of factors in incurring determining whether there is significant potential for material additional cost, complication or even litigation. Given these limitation and other include the duration and intimacy of the lawyer's relationship relevant factors, the clients may prefer that the lawyer act for with the all of them. client or clients involved, the functions being performed by See also Washington Comment [40]. the lawyer, the likelihood that disagreements will arise and the likely Special Considerations in Common Representation prejudice to [29] In considering whether to represent multiple clients in the client from the conflict. The question is often one of the same proximity and matter, a lawyer should be mindful that if the common degree. See Comment [8]. representation fails because the potentially adverse interests cannot be [27] For example, conflict questions may arise in estate reconciled, the result planning and can be additional cost, embarrassment and recrimination. estate administration. A lawyer may be called upon to Ordinarily, the prepare wills for lawyer will be forced to withdraw from representing all of the several family members, such as husband and wife, and, clients if depending upon the circumstances, a conflict of interest may the common representation fails. In some situations, the risk be present. In estate of failure is administration the identity of the client may be unclear under so great that multiple representation is plainly impossible. For the law of a example, a particular jurisdiction. Under one view, the client is the lawyer cannot undertake common representation of clients fiduciary; under where contentious litigation or negotiations between them another view the client is the estate or trust, including its are imminent or contemplated. Moreover, because the lawyer beneficiaries. In order to comply with conflict of interest rules, is required to be impartial between commonly represented the clients, representation of multiple clients is improper when it lawyer should make clear the lawyer's relationship to the is unlikely that impartiality can be maintained. Generally, if parties involved. the relationship between the parties has already assumed antagonism, the [28] Whether a conflict is consentable depends on the possibility that the clients' interests can be adequately circumstances. For served by common example, a lawyer may not represent multiple parties to a representation is not very good. Other relevant factors are negotiation whose whether the c:strait/cle/18th Annual ‘Annual Adv. Conf on Commercial Real Estate Leases. 12.15.06.doc Page 33 lawyer subsequently will represent both parties on a representation involving a joint venture between the clients continuing basis and and agree to whether the situation involves creating or terminating a keep that information confidential with the informed consent relationship of both between the parties. clients.

[30] A particularly important factor in determining the [32] When seeking to establish or adjust a relationship appropriateness between clients, of common representation is the effect on client-lawyer the lawyer should make clear that the lawyer's role is not that confidentiality and of the attorney-client privilege. With regard to the attorney- partisanship normally expected in other circumstances and, client thus, that the privilege, the prevailing rule is that, as between commonly clients may be required to assume greater responsibility for represented decisions than clients, the privilege does not attach. Hence, it must be when each client is separately represented. Any limitations assumed that if on the scope of litigation eventuates between the clients, the privilege will the representation made necessary as a result of the not protect common representation any such communications, and the clients should be so should be fully explained to the clients at the outset of the advised. representation. See Rule 1.2(c).

[31] As to the duty of confidentiality, continued common [33] Subject to the above limitations, each client in the representation common will almost certainly be inadequate if one client asks the representation has the right to loyal and diligent lawyer not to representation and the disclose to the other client information relevant to the protection of Rule 1.9 concerning the obligations to a former common client. The representation. This is so because the lawyer has an equal client also has the right to discharge the lawyer as stated in duty of loyalty Rule 1.16. to each client, and each client has the right to be informed of See also Washington Comment [41]. anything bearing on the representation that might affect that client's Organizational Clients interests and [34] A lawyer who represents a corporation or other the right to expect that the lawyer will use that information to organization does that not, by virtue of that representation, necessarily represent client's benefit. See Rule 1.4. The lawyer should, at the outset any of the constituent or affiliated organization, such as a parent or common representation and as part of the process of subsidiary. See obtaining each client's Rule 1.13(a). Thus, the lawyer for an organization is not informed consent, advise each client that information will be barred from shared and accepting representation adverse to an affiliate in an that the lawyer will have to withdraw if one client decides unrelated matter, that some unless the circumstances are such that the affiliate should matter material to the representation should be kept from also be the other. In considered a client of the lawyer, there is an understanding limited circumstances, it may be appropriate for the lawyer to between the proceed with lawyer and the organizational client that the lawyer will avoid the representation when the clients have agreed, after being representation adverse to the client's affiliates, or the properly lawyer's informed, that the lawyer will keep certain information obligations to either the organizational client or the new confidential. For client are example, the lawyer may reasonably conclude that failure to likely to limit materially the lawyer's representation of the disclose one other client. client's trade secrets to another client will not adversely affect c:strait/cle/18th Annual ‘Annual Adv. Conf on Commercial Real Estate Leases. 12.15.06.doc Page 34 [35] A lawyer for a corporation or other organization who is required under former Washington RPC 1.7(b), i.e., that "the also a representation member of its board of directors should determine whether of the client may be materially limited by the lawyer's the responsibilities responsibilities of the two roles may conflict. The lawyer may to another client or to a third person, or by the lawyer's own be called on interests." to advise the corporation in matters involving actions of the directors. Prohibited Representations Consideration should be given to the frequency with which [38] In Washington, a governmental client is not prohibited such situations from may arise, the potential intensity of the conflict, the effect of properly consenting to a representational conflict of interest. the lawyer's resignation from the board and the possibility of the Informed Consent corporation's obtaining legal advice from another lawyer in [39] Paragraph (b)(4) of the Rule differs slightly from the such Model Rule situations. If there is material risk that the dual role will in that it expressly requires authorization from the other compromise client before the lawyer's independence of professional judgment, the any required disclosure of information relating to that client lawyer should not can be made. serve as a director or should cease to act as the corporation's Authorization to make a disclosure of information relating to lawyer when the conflicts of interest arise. The lawyer should advise the other representation requires the client's informed consent. See members of Rule 1.6(a). the board that in some circumstances matters discussed at board meetings Nonlitigation Conflicts while the lawyer is present in the capacity of director might [40] Under Washington case law, in estate administration not be matters the protected by the attorney-client privilege and that conflict of client is the personal representative of the estate. interest considerations might require the lawyer's recusal as a Special Considerations in Common Representation director or might [41] Various legal provisions, including constitutional, require the lawyer and the lawyer's firm to decline statutory and representation of the common law, may define the duties of government lawyers in corporation in a matter. representing public officers, employees, and agencies and should be Additional Washington Comments (36 - 41) considered in evaluating the nature and propriety of common General Principles representation. [36] Notwithstanding Comment [3], lawyers providing short- term limited [Amended effective September 1, 2006.] legal services to a client under the auspices of a program sponsored by a nonprofit organization or court are not normally required to systematically RPC RULE 1.8: Conflict Of screen for conflicts of interest before undertaking a Interest: Current Clients: representation. See Comment [1] to Rule 6.5. See Rule 1.2(c) for requirements Specific Rules applicable to the provision of limited legal services. (a) A lawyer shall not enter into a business transaction with a client or Identifying Conflicts of Interest: Material Limitation knowingly acquire an ownership, possessory, security or [37] Use of the term "significant risk" in paragraph (a)(2) is other pecuniary not interest adverse to a client unless: intended to be a substantive change or diminishment in the standard c:strait/cle/18th Annual ‘Annual Adv. Conf on Commercial Real Estate Leases. 12.15.06.doc Page 35 (1) the transaction and terms on which the lawyer acquires (1) a lawyer may advance court costs and expenses of the interest litigation, the are fair and reasonable to the client and are fully disclosed repayment of which may be contingent on the outcome of and the matter; and transmitted in writing in a manner that can be reasonably understood by the client; (2) a lawyer representing an indigent client may pay court costs and (2) the client is advised in writing of the desirability of expenses of litigation on behalf of the client. seeking and is given a reasonable opportunity to seek the advice of (f) A lawyer shall not accept compensation for representing independent legal a client from counsel on the transaction; and one other than the client unless:

(3) the client gives informed consent, in a writing signed by (1) the client gives informed consent; the client, to the essential terms of the transaction and the (2) there is no interference with the lawyer's lawyer's role in independence of the transaction, including whether the lawyer is representing professional judgment or with the client-lawyer relationship; the client in and the transaction. (3) information relating to representation of a client is (b) A lawyer shall not use information relating to protected as representation of a required by Rule 1.6. client to the disadvantage of the client unless the client gives informed (g) A lawyer who represents two or more clients; shall not consent, expect as permitted or required by these Rules. participate in making an aggregate settlement of the claims of or against (c) A lawyer shall not solicit any substantial gift from a the clients, or client, in a criminal case an aggregated agreement as to guilty or including a testamentary gift, or prepare on behalf of the nolo contendere client an pleas, unless each client gives informed consent, confirmed instrument giving the lawyer or a person related to the in writing. The lawyer any lawyer's disclosure shall include the existence and nature of substantial gift unless the lawyer or other recipient of the gift all the is claims or pleas involved and the participation of each person related to the client. For purposes of this paragraph, related in the persons settlement. include spouse, child, grandchild, parent, grandparent or other relative or (h) A lawyer shall not: individual with who the lawyer or the client maintains a close, familial relationship. (1) make an agreement prospectively limiting the lawyer's liability to (d) Prior to the conclusion of representation of a client, a a client for malpractice unless permitted by law and the client lawyer shall is not make or negotiate an agreement giving the lawyer independently represented in making the agreement; or literary or media rights to a portrayal or account based in substantial part on (2) settle a claim or potential claim for such liability with information an relating to the representation. unrepresented client or former client unless that person is advised in (e) A lawyer shall not provide financial assistance to a client writing of the desirability of seeking and is given a reasonable in opportunity to seek the advice of independent legal counsel connection with pending or contemplated litigation, except in connection therewith. that:

c:strait/cle/18th Annual ‘Annual Adv. Conf on Commercial Real Estate Leases. 12.15.06.doc Page 36 (i) A lawyer shall not acquire a proprietary interest in the Comment cause of Business Transactions Between Client and Lawyer action or subject matter of litigation the lawyer is conducting [1] A lawyer's legal skill and training, together with the for a relationship client, except that the lawyer may: of trust and confidence between lawyer and client, create the possibility (1) acquire a lien authorized by law to secure the lawyer's of overreaching when the lawyer participates in a business, fee or property or expenses; and financial transaction with a client, for example, a loan or sales transaction or a lawyer investment on behalf of a client. The (2) contract with a client for a reasonable contingent fee in requirements a civil case. of paragraph (a) must be met even when the transaction is not closely (j) A lawyer shall not: related to the subject matter of the representation, as when a lawyer (1) have sexual relations with a current client of the drafting a will for a client learns that the client needs money lawyer unless a for consensual sexual relationship existed between them at the unrelated expenses and offers to make a loan to the client. time the client- The Rule lawyer relationship commenced; or applies to lawyers engaged in the sale of goods or services related to the (2) have sexual relations with a representative of a current practice of law, for example, the sale of title insurance or client if investment the sexual relations would, or would likely, damage or services to existing clients of the lawyer's legal practice. See prejudice the client Rule 5.7. in the representation. It also applies to lawyers purchasing property from estates they represent. (3) For purposes of Rule 1.8(j), "lawyer" means any lawyer It does not apply to ordinary fee arrangements between who assists client and lawyer, in the representation of the client, but does not include other which are governed by Rule 1.5, although its requirements firm must be met when members who provide no such assistance. the lawyer accepts an interest in the client's business or other (k) While lawyers area associated in a firm, a prohibition in nonmonetary property as payment of all or part of a fee. In the addition, the foregoing paragraphs (a) through (i) that applies to anyone of Rule does not apply to standard commercial transactions them shall between the lawyer apply to all of them. and the client for products or services that the client generally markets (l) A lawyer who is related to another lawyer as parent, to others, for example, banking or brokerage services, child, sibling, medical services, or spouse, or who has any other close familial or intimate products manufactured or distributed by the client, and relationship utilities' with another lawyer, shall not represent a client in a matter services. In such transactions, the lawyer has no advantage directly in dealing with adverse to a person who the lawyer knows is represented by the client, and the restrictions in paragraph (a) are the related unnecessary and impracticable. lawyer unless: [2] Paragraph (a)(1) requires that the transaction itself be (1) the client gives informed consent to the fair to the representation; and client and that its essential terms be communicated to the client, in (2) the representation is not otherwise prohibited by Rule writing, in a manner that can be reasonably understood. 1.7 Paragraph (a)(2)

c:strait/cle/18th Annual ‘Annual Adv. Conf on Commercial Real Estate Leases. 12.15.06.doc Page 37 requires that the client also be advised, in writing, of the by the lawyer involved in the transaction or by the client's desirability independent of seeking the advice of independent legal counsel. It also counsel. The fact that the client was independently requires that represented in the the client be given a reasonable opportunity to obtain such transaction is relevant in determining whether the agreement advice. was fair and Paragraph (a)(3) requires that the lawyer obtain the client's reasonable to the client as paragraph (a)(1) further requires. informed consent, in a writing signed by the client, both to the Use of Information Related to Representation essential terms of [5] [Washington revision] Use of information relating to the the transaction and to the lawyer's role. When necessary, the representation to the disadvantage of the client violates the lawyer should lawyer's duty discuss both the material risks of the proposed transaction, of loyalty. Paragraph (b) applies when the information is used including any to benefit risk presented by the lawyer's involvement, and the either the lawyer or a third person, such as another client or existence of reasonably business available alternatives and should explain why the advice of associate of the lawyer. For example, if a lawyer learns that a independent client legal counsel is desirable. See Rule 1.0(e) (definition of intends to purchase and develop several parcels of land, the informed consent). lawyer may not use that information to purchase one of the parcels in [3] The risk to a client is greatest when the client expects competition with the the lawyer client or to recommend that another client make such a to represent the client in the transaction itself or when the purchase. The Rule lawyer's does not prohibit uses that do not disadvantage the client. financial interest otherwise poses a significant risk that the For example, a lawyer's lawyer who learns a government agency's interpretation of representation of the client will be materially limited by the trade legislation lawyer's during the representation of one client may properly use that financial interest in the transaction. Here the lawyer's role information requires that to benefit other clients. Paragraph (b) prohibits the lawyer must comply, not only with the requirements of disadvantageous use of paragraph (a), client information unless the client gives informed consent, but also with the requirements of Rule 1.7. Under that Rule, except as the lawyer permitted or required by these Rules. must disclose the risks associated with the lawyer's dual role See Rules 1.2(d), 1.6, 1.9(c), 3.3, 4.1(b), and 8.1. as both legal adviser and participant in the transaction, such as the Gifts to Lawyers risk that the [6] A lawyer may accept a gift from a client, if the lawyer will structure the transaction or give legal advice in a transaction meets way that general standards of fairness. For example, a simple gift such favors the lawyer's interests at the expense of the client. as a present Moreover, the given at a holiday or as a token of appreciation is permitted. lawyer must obtain the client's informed consent. In some If a client cases, the offers the lawyer a more substantial gift, paragraph (c) does lawyer's interest may be such that Rule 1.7 will preclude the not prohibit lawyer from the lawyer from accepting it, although such a gift may be seeking the client's consent to the transaction. voidable by the client under the doctrine of undue influence, which treats [4] If the client is independently represented in the client gifts as transaction, presumptively fraudulent. In any event, due to concerns paragraph (a)(2) of this Rule is inapplicable, and the about overreaching paragraph (a)(1) and imposition on clients, a lawyer may not suggest that a requirement for full disclosure is satisfied either by a written substantial gift disclosure c:strait/cle/18th Annual ‘Annual Adv. Conf on Commercial Real Estate Leases. 12.15.06.doc Page 38 be made to the lawyer or for the lawyer's benefit, except [10] Lawyers may not subsidize lawsuits or administrative where the lawyer proceedings is related to the client as set forth in paragraph (c). brought on behalf of their clients, including making or guaranteeing loans [7] If effectuation of a substantial gift requires preparing a to their clients for living expenses, because to do so would legal encourage instrument such as a will or conveyance the client should clients to pursue lawsuits that might not otherwise be have the detached brought and because advice that another lawyer can provide. The sole exception to such assistance gives lawyers too great a financial stake in this Rule is the where the client is a relative of the donee. litigation. These dangers do not warrant a prohibition on a lawyer lending [8] This Rule does not prohibit a lawyer from seeking to a client court costs and litigation expenses, including the have the lawyer expenses of or a partner or associate of the lawyer named as executor of medical examination and the costs of obtaining and the client's presenting evidence, estate or to another potentially lucrative fiduciary position. because these advances are virtually indistinguishable from Nevertheless, such appointments will be subject to the contingent fees general conflict of and help ensure access to the courts. Similarly, an exception interest provision in Rule 1.7 when there is a significant risk allowing that the lawyers representing indigent clients to pay court costs and lawyer's interest in obtaining the appointment will materially litigation limit the expenses regardless of whether these funds will be repaid is lawyer's independent professional judgment in advising the warranted. client concerning the choice of an executor or other fiduciary. In Person Paying for a Lawyer's Services obtaining the [11] Lawyers are frequently asked to represent a client client's informed consent to the conflict, the lawyer should under advise the circumstances in which a third person will compensate the client concerning the nature and extent of the lawyer's lawyer, in whole financial interest or in part. The third person might be a relative or friend, an in the appointment, as well as the availability of alternative indemnitor candidates (such as a liability insurance company) or a co-client (such as for the position. a corporation sued along with one or more of its employees). Literary Rights Because third- [9] An agreement by which a lawyer acquires literary or party payers frequently have interests that differ from those media rights of the concerning the conduct of the representation creates a client, including interests in minimizing the amount spent on conflict between the the interests of the client and the personal interests of the representation and in learning how the representation is lawyer. Measures progressing, suitable in the representation of the client may detract from lawyers are prohibited from accepting or continuing such the representations publication value of an account of the representation. unless the lawyer determines that there will be no Paragraph (d) does interference with the not prohibit a lawyer representing a client in a transaction lawyer's independent professional judgment and there is concerning informed consent literary property from agreeing that the lawyer's fee shall from the client. See also Rule 5.4(c) (prohibiting interference consist of a with a share in ownership in the property, if the arrangement lawyer's professional judgment by one who recommends, conforms to Rule 1.5 employs or pays the lawyer to render legal services for and paragraphs (a) and (i). another).

Financial Assistance c:strait/cle/18th Annual ‘Annual Adv. Conf on Commercial Real Estate Leases. 12.15.06.doc Page 39 [12] Sometimes, it will be sufficient for the lawyer to obtain informed consent). Lawyers representing a class of plaintiffs the or client's informed consent regarding the fact of the payment defendants, or those proceeding derivatively, may not have a and the full client- identity of the third-party payer. If, however, the fee lawyer relationship with each member of the class; arrangement creates nevertheless, such a conflict of interest for the lawyer, then the lawyer must lawyers must comply with applicable rules regulating comply with notification of class Rule. 1.7. The lawyer must also conform to the requirements members and other procedural requirements designed to of Rule 1.6 ensure adequate concerning confidentiality. Under Rule 1.7(a), a conflict of protection of the entire class. interest exists if there is significant risk that the lawyer's Limiting Liability and Settling Malpractice Claims representation of the [14] [Washington revision] Agreements prospectively client will be materially limited by the lawyer's own interest in limiting a lawyer's the fee liability for malpractice are prohibited unless permitted by arrangement or by the lawyer's responsibilities to the third- law and the party payer client is independently represented in making the agreement (for example, when the third-party payer is a co-client). because they Under Rule are likely to undermine competent and diligent 1.7(b), the lawyer may accept or continue the representation representation. Also, many with the clients are unable to evaluate the desirability of making such informed consent of each affected client, unless the conflict is an agreement nonconsentable under that paragraph. Under Rule 1.7(b), the before a dispute has arisen, particularly if they are then informed represented by consent must be confirmed in writing. the lawyer seeking the agreement. This paragraph does not, however, Aggregate Settlements prohibit a lawyer from entering into an agreement with the [13] Differences in willingness to make or accept an offer of client to settlement arbitrate legal malpractice claims, provided such agreements are among the risks of common representation of multiple are clients by a enforceable and the client is fully informed of the scope and single lawyer. Under Rule 1.7, this is one of the risks that effect of the should be agreement. Nor does this paragraph limit the ability of discussed before undertaking the representation, as part of lawyers to practice the process of in the form of a limited-liability entity, where permitted by obtaining the clients' informed consent. In addition, Rule law, provided 1.2(a) protects that each lawyer remains personally liable to the client for his each client's right to have the final say in deciding whether to or her own accept or conduct and the firm complies with any conditions required reject an offer of settlement and in deciding whether to enter by law, such as a guilty or provisions requiring client notification or maintenance of nolo contendere plea in a criminal case. The rule stated in adequate this paragraph liability insurance. Nor does it prohibit an agreement in is a corollary of both these Rules and provides that, before accordance with any settlement Rule 1.2 that defines the scope of the representation, offer or plea bargain is made or accepted on behalf of although a multiple clients, definition of scope that makes the obligations of the lawyer must inform each of them about all the material representation illusory terms of the will amount to an attempt to limit liability. settlement, including what the other clients will receive or pay if the [15] Agreements settling a claim or a potential claim for settlement or plea offer is accepted. See also Rule 1.0(e) malpractice (definition of are not prohibited by this Rule. Nevertheless, in view of the danger that a c:strait/cle/18th Annual ‘Annual Adv. Conf on Commercial Real Estate Leases. 12.15.06.doc Page 40 lawyer will take unfair advantage of an unrepresented client which the lawyer occupies the highest position of trust and or former confidence. The client, the lawyer must first advise such a person in writing of relationship is almost always unequal; thus, a sexual the relationship between appropriateness of independent representation in connection lawyer and client can involve unfair exploitation of the with such a lawyer's fiduciary settlement. In addition, the lawyer must give the client or role, in violation of the lawyer's basic ethical obligation not to former client a use the reasonable opportunity to find and consult independent trust of the client to the client's disadvantage. In addition, counsel. such a relationship presents a significant danger that, because of Acquiring Proprietary Interest in Litigation the lawyer's [16] Paragraph (i) states the traditional general rule that emotional involvement, the lawyer will be unable to lawyers are represent the client prohibited from acquiring a proprietary interest in litigation. without impairment of the exercise of independent Like professional judgment. paragraph (e), the general rule has its basis in common law Moreover, a blurred line between the professional and champerty and personal maintenance and is designed to avoid giving the lawyer too relationships may make it difficult to predict to what extent great an client interest in the representation. In addition, when the lawyer confidences will be protected by the attorney-client acquires an evidentiary privilege, ownership interest in the subject of the representation, it will since client confidences are protected by privilege only when be more they are difficult for a client to discharge the lawyer if the client so imparted in the context of the client-lawyer relationship. desires. Because of the The Rule is subject to specific exceptions developed in significant danger of harm to client interests and because the decisional law and client's own continued in these Rules. The exception for certain advances emotional involvement renders it unlikely that the client of the costs could give of litigation is set forth in paragraph (e). In addition, adequate informed consent, this Rule prohibits the lawyer paragraph (i) from having sets forth exceptions for liens authorized by law to secure the sexual relations with a client regardless of whether the lawyer's relationship is fees or expenses and contracts for reasonable contingent consensual and regardless of the absence of prejudice to the fees. The law of client. each jurisdiction determines which liens are authorized by law. These may [18] Sexual relationships that predate the client-lawyer include liens granted by statute, liens originating in common relationship law and liens are not prohibited. Issues relating to the exploitation of the acquired by contract with the client. When a lawyer acquires fiduciary by contract a relationship and client dependency are diminished when the security interest in property other than that recovered sexual through the relationship existed prior to the commencement of the client- lawyer's efforts in the litigation, such an acquisition is a lawyer business or relationship. However, before proceeding with the financial transaction with a client and is governed by the representation in these requirements of circumstances, the lawyer should consider whether the paragraph (a). Contracts for contingent fees in civil cases are lawyer's ability to governed by Rule 1.5. represent the client will be materially limited by the relationship. Client-Lawyer Sexual Relationships See Rule 1.7(a)(2). [17] The relationship between lawyer and client is a fiduciary one in [19] [Washington revision] When the client is an organization, paragraph c:strait/cle/18th Annual ‘Annual Adv. Conf on Commercial Real Estate Leases. 12.15.06.doc Page 41 (j) of this Rule applies to a lawyer for the organization (l) of Washington's Rule. Paragraph (l) prohibits (whether inside representations based on or outside counsel). For purposes of this Rule, "representative a lawyer's personal conflict arising from his or her of a relationship with current client" will generally be a constituent of the another lawyer. Paragraph (l) is a revised version of former organization who Washington RPC supervises, directs or regularly consults with that lawyer on 1.8(i). See also Comment [11] to Rule 1.7. the organization's legal matters. See Comment [1] to Rule 1.13 [Amended effective September 1, 2006.] (identifying the constituents of an organizational client).

See also Washington Comments [21] and [22]. RPCRULE 1.9: DUTIES TO FORMER CLIENTS Imputation of Prohibitions [20] Under paragraph (k), a prohibition on conduct by an individual (a) A lawyer who has formerly represented a client in a lawyer in paragraphs (a) through (i) also applies to all lawyers matter shall not associated thereafter represent another person in the same or a in a firm with the personally prohibited lawyer. For example, substantially related one lawyer in matter in which that person's interests are materially adverse a firm may not enter into a business transaction with a client to the of another interests of the former client unless the former client gives member of the firm without complying with paragraph (a), informed even if the first consent, confirmed in writing. lawyer is not personally involved in the representation of the client. The (b) A lawyer shall not knowingly represent a person in the prohibition set forth in paragraph (j) is personal and is not same or a applied to substantially related matter in which a firm with which the associated lawyers. lawyer formerly was associated had previously represented a client Additional Washington Comments (21-23) (1) whose interests are materially adverse to that person; and Client-Lawyer Sexual Relationships [21] Paragraph (j)(2) of Washington's Rule, which prohibits (2) about whom that lawyer had acquired information sexual protected by relationships with a representative of an organizational client, Rules 1.6 and 1.9(c) that is material to the matter; unless the differs former from the Model Rule. Comment [19] to Model Rule 1.8 was client gives informed consent, confirmed in writing. revised to be consistent with the Washington Rule. (c) A lawyer who has formerly represented a client in a matter or [22] Paragraph (j)(3) of the Rule specifies that the whose present or former firm has formerly represented a prohibition applies client in a matter with equal force to any lawyer who assists in the shall not thereafter: representation of the client, but the prohibition expressly does not apply to other (1) use information relating to the representation to the members of a disadvantage of the former client except as these Rules firm who have not assisted in the representation. would permit or require with respect to a client, or when the information has become Personal Relationships generally known; or [23] Model Rule 1.8 does not contain a provision equivalent to paragraph c:strait/cle/18th Annual ‘Annual Adv. Conf on Commercial Real Estate Leases. 12.15.06.doc Page 42 (2) reveal information relating to the representation military lawyers between defense and prosecution functions except as these within the same Rules would permit or require with respect to a client. military jurisdictions. The underlying question is whether the lawyer was Comment so involved in the matter that the subsequent representation can be justly [1] After termination of a client-lawyer relationship, a lawyer regarded as a changing of sides in the matter in question. has certain continuing duties with respect to confidentiality and [3] Matters are "substantially related" for purposes of this conflicts of Rule if interest and thus may not represent another client except in they involve the same transaction or legal dispute or if there conformity otherwise with this Rule. Under this Rule, for example, a lawyer could is a substantial risk that confidential factual information as not properly would seek to rescind on behalf of a new client a contract drafted normally have been obtained in the prior representation on behalf of would materially the former client. So also a lawyer who has prosecuted an advance the client's position in the subsequent matter. For accused person example, a could not properly represent the accused in a subsequent lawyer who has represented a businessperson and learned civil action extensive private against the government concerning the same transaction. financial information about that person may not then Nor could a lawyer represent that who has represented multiple clients in a matter represent person's spouse in seeking a divorce. Similarly, a lawyer who one of the has clients against the others in the same or a substantially previously represented a client in securing environmental related matter permits to build after a dispute arose among the clients in that matter, unless a shopping center would be precluded from representing all neighbors seeking affected clients give informed consent. See Comment [9]. to oppose rezoning of the property on the basis of Current and environmental former government lawyers must comply with this Rule to the considerations; however, the lawyer would not be precluded, extent on the grounds required by Rule 1.11. of substantial relationship, from defending a tenant of the completed [2] The scope of a "matter" for purposes of this Rule shopping center in resisting eviction for nonpayment of rent. depends on the Information facts of a particular situation or transaction. The lawyer's that has been disclosed to the public or to other parties involvement adverse to the in a matter can also be a question of degree. When a lawyer former client ordinarily will not be disqualifying. Information has been acquired directly involved in a specific transaction, subsequent in a prior representation may have been rendered obsolete representation of by the passage other clients with materially adverse interests in that of time, a circumstance that may be relevant in determining transaction whether two clearly is prohibited. On the other hand, a lawyer who representations are substantially related. In the case of an recurrently handled organizational client, general knowledge of the client's a type of problem for a former client is not precluded from policies and later practices ordinarily will not preclude a subsequent representing another client in a factually distinct problem of representation; on the that type other hand, knowledge of specific facts gained in a prior even though the subsequent representation involves a representation position adverse to that are relevant to the matter in question ordinarily will the prior client. Similar considerations can apply to the preclude such reassignment of a representation. A former client is not required to reveal the

c:strait/cle/18th Annual ‘Annual Adv. Conf on Commercial Real Estate Leases. 12.15.06.doc Page 43 confidential information learned by the lawyer in order to the firm, and that lawyer later joined another firm, neither establish a the lawyer substantial risk that the lawyer has confidential information individually nor the second firm is disqualified from to use in representing another the subsequent matter. A conclusion about the possession of client in the same or a related matter even though the such interests of the information may be based on the nature of the services the two clients conflict. See Rule 1.10(e) and (b) for the lawyer provided restrictions on a the former client and information that would in ordinary firm when a lawyer initiates an association with the firm or practice be has learned by a lawyer providing such services. terminated an association with the firm.

Lawyers Moving Between Firms [6] Application of paragraph (b) depends on a situation's [4] When lawyers have been associated within a firm but particular then end their facts, aided by inferences, deductions or working association, the question of whether a lawyer should presumptions that undertake reasonably may be made about the way in which lawyers representation is more complicated. There are several work together. A competing lawyer may have general access to files of all clients of a law considerations. First, the client previously represented by the firm and former may regularly participate in discussions of their affairs; it firm must be reasonably assured that the principle of loyalty should be to the inferred that such a lawyer in fact is privy to all information client is not compromised. Second, the rule should not be so about all broadly cast the firm's clients. In contrast, another lawyer may have as to preclude other persons from having reasonable choice access to the of legal files of only a limited number of clients and participate in counsel. Third, the rule should not unreasonably hamper discussions lawyers from of the affairs of no other clients; in the absence of information forming new associations and taking on new clients after to the having left a contrary, it should be inferred that such a lawyer in fact is previous association. In this connection, it should be privy to recognized that information about the clients actually served but not those of today many lawyers practice in firms, that many lawyers to other some degree clients. In such an inquiry, the burden of proof should rest limit their practice to one field or another, and that many upon the firm move from one whose disqualification is sought. association to another several times in their careers. If the concept of [7] Independent of the question of disqualification of a firm, imputation were applied with unqualified rigor, the result a lawyer would be changing professional association has a continuing duty to radical curtailment of the opportunity of lawyers to move preserve from one confidentiality of information about a client formerly practice setting to another and of the opportunity of clients to represented. change counsel. See Rules 1.6 and 1.9(c).

[5] [Washington revision] Paragraph (b) operates to [8] Paragraph (c) provides that information acquired by the disqualify the lawyer in lawyer only when the lawyer involved has actual knowledge the course of representing a client may not subsequently be of information used or protected by Rules 1.6 and 1.9(c). Thus, if a lawyer while with revealed by the lawyer to the disadvantage of the client. one firm However, the acquired no knowledge or information relating to a particular fact that a lawyer has once served a client does not preclude client of the lawyer

c:strait/cle/18th Annual ‘Annual Adv. Conf on Commercial Real Estate Leases. 12.15.06.doc Page 44 from using generally known information about that client (e) When a lawyer becomes associated with a firm, no when later other lawyer in the firm shall knowingly represent a person representing another client. in a matter in which that lawyer is disqualified under Rule 1.9 unless: [9] [Washington revision] The provisions of this Rule are for the (1) the personally disqualified lawyer is screened by protection of former clients and can be waived if the client effective means from participation in the matter and is gives apportioned no part of the fee therefrom; informed consent, which consent must be confirmed in writing under (2) the former client of the personally disqualified paragraphs (a) and (b). See Rule 1.0(e). With regard to lawyer receives notice of the conflict and the screening disqualification mechanism used to prohibit dissemination of information of a firm with which a lawyer is or was formerly associated, relating to the former representation; see Rule 1.10. (3) the firm is able to demonstrate by convincing [Amended effective September 1, 2006.] evidence that no material information relating to the former representation was transmitted by the personally disqualified lawyer before implementation of the screening RPC RULE 1.10: Imputation of mechanism and notice to the former client. Conflicts of Interest: General Any presumption that information protected by Rules 1.6 and 1.9(c) has been or will be transmitted may be rebutted Rule if the personally disqualified lawyer serves on his or her former law firm and former client an affidavit attesting (a) Except as provided in paragraph (c), while lawyers are that the personally disqualified lawyer will not participate associated in a firm, none of them shall knowingly represent in the matter and will not discuss the matter or the a client when any one of them practicing alone would be representation with any other lawyer or employee of his or prohibited from doing so by Rules 1.7 or 1.9, unless the her current law firm, and attesting that during the period prohibition is based on a personal interest of the of the lawyer's personal disqualification those lawyers or prohibited lawyer and does not present a significant risk of employees who do participate in the matter will be apprised materially limiting the representation of the client by the that the personally disqualified lawyer is screened from remaining lawyers in the firm. participating in or discussing the matter. Such affidavit shall describe the procedures being used effectively to (b) When a lawyer has terminated an association with a screen the personally disqualified lawyer. Upon request of firm, the firm is not prohibited from thereafter the former client, such affidavit shall be updated representing a person with interests materially adverse to periodically to show actual compliance with the screening those of a client represented by the formerly associated procedures. The law firm, the personally disqualified lawyer and not currently represented by the firm, unless: lawyer, or the former client may seek judicial review in a court of general jurisdiction of the screening mechanism (1) the matter is the same or substantially related to used, or may seek court supervision to ensure that that in which the formerly associated lawyer represented the implementation of the screening procedures has occurred client; and and that effective actual compliance has been achieved. (2) any lawyer remaining in the firm has information protected by Rules 1.6 and 1.9(c) that is material to the Comment matter. Definition of "Firm" [1] For purposes of the Rules of Professional Conduct, the (c) A disqualification prescribed by this rule may be term "firm" denotes lawyers in a law partnership, waived by the affected client under the conditions stated in professional corporation, sole proprietorship or other Rule 1.7. association authorized to practice law; or lawyers employed in a legal services organization or the legal department of (d) The disqualification of lawyers associated in a firm a corporation or other organization. See Rule 1.0(c). with former or current government lawyers is governed by Whether two or more lawyers constitute a firm within this Rule 1.11. definition can depend on the specific facts. See Rule 1.0, Comments [2] - [4]. c:strait/cle/18th Annual ‘Annual Adv. Conf on Commercial Real Estate Leases. 12.15.06.doc Page 45 definition of informed consent, see Rule 1.0(e). Principles of Imputed Disqualification [2] [Washington revision] The rule of imputed [7] Where a lawyer has joined a private firm after having disqualification stated in paragraph (a) gives effect to the represented the government, imputation is governed by Rule principle of loyalty to the client as it applies to lawyers 1.11(b) and (c), not this Rule. Under Rule 1.11(d), where a who practice in a law firm. Such situations can be lawyer represents the government after having served clients considered from the premise that a firm of lawyers is in private practice, nongovernmental employment or in essentially one lawyer for purposes of the rules governing another government agency, former-client conflicts are not loyalty to the client, or from the premise that each lawyer imputed to government lawyers associated with the is vicariously bound by the obligation of loyalty owed by individually disqualified lawyer. each lawyer with whom the lawyer is associated. Paragraph (a) operates only among the lawyers currently associated in [8] Where a lawyer is prohibited from engaging in certain a firm. When a lawyer moves from one firm to another, the transactions under Rule 1.8, paragraph (k) of that Rule, and situation is governed by Rules 1.9(b) and 1.10(b) and (e). not this Rule, determines whether that prohibition also applies to other lawyers associated in a firm with the [3] The rule in paragraph (a) does not prohibit personally prohibited lawyer. representation where neither questions of client loyalty nor protection of confidential information are presented. Where Additional Washington Comments (9 - 13) one lawyer in a firm could not effectively represent a given client because of strong political beliefs, for example, but Principles of Imputed Disqualification that lawyer will do no work on the case and the personal [9] Former Washington RPC 1.10 differed significantly from beliefs of the lawyer will not materially limit the the Model Rule. This difference was attributable in part to representation by others in the firm, the firm should not be a 1989 amendment to Model Rule 1.10 that recodified disqualified. On the other hand, if an opposing party in a conflicts based on a lawyer's former association with a firm case were owned by a lawyer in the law firm, and others in into Model Rule 1.9, and in part to Washington's adoption of the firm would be materially limited in pursuing the matter a screening rule in 1993. Washington's Rule has been because of loyalty to that lawyer, the personal restructured to make it and Rule 1.9 more consistent with disqualification of the lawyer would be imputed to all the Model Rules. The conflicts that arise based on a others in the firm. lawyer's former association with a firm are now addressed in Rules 1.9(a) and (b), while Rule 1.10 addresses solely [4] [Reserved. See Washington Comment [11].] imputation of that conflict. Under Rule 1.9(a), such a lawyer need not have actually acquired information protected [5] Rule 1.10(b) operates to permit a law firm, under by Rules 1.6 and 1.9 to be disqualified personally, but certain circumstances, to represent a person with interests because acquisition of confidential information is presumed directly adverse to those of a client represented by a in Washington, see, e.g., Teja v. Saran, 68 Wn. App. 793, lawyer who formerly was associated with the firm. The Rule 846 P.2d 1375 (1993), review denied, 122 Wn.2d 1008, 859 applies regardless of when the formerly associated lawyer P.2d 604 (1993); Kurbitz v. Kurbitz, 77 Wn.2d 943, 468 P.2d represented the client. However, the law firm may not 673 (1970), the recodification does not represent a change represent a person with interests adverse to those of a in Washington law. The Rule preserves prior Washington present client of the firm, which would violate Rule 1.7. practice with respect to screening by allowing a personally Moreover, the firm may not represent the person where the disqualified lawyer to be screened from a representation to matter is the same or substantially related to that in which be undertaken by other members of the firm under the the formerly associated lawyer represented the client and circumstances set forth in paragraph (e). See Washington any other lawyer currently in the firm has material Comment [10]. information protected by Rules 1.6 and 1.9(c). [10] Washington's RPC 1.10 was amended in 1993 to permit [6] [Washington revision] Rule 1.10(c) removes imputation representation with screening under certain circumstances. with the informed consent of the affected client or former Model Rule 1.10 does not contain a screening mechanism. client under the conditions stated in Rule 1.7. The Rule conditions stated in Rule 1.7 require the lawyer to 1.10(e) retains the screening mechanism adopted as determine that the representation is not prohibited by Rule Washington RPC 1.10(b) in 1993, thus allowing a firm to 1.7(b) and that each affected client or former client has represent a client with whom a lawyer in the firm has a given informed consent to the representation, confirmed in conflict based on his or her association with a prior firm writing. In some cases, the risk may be so severe that the if the lawyer is effectively screened from participation in conflict may not be cured by client consent. For a the representation, is apportioned no part of the fee earned c:strait/cle/18th Annual ‘Annual Adv. Conf on Commercial Real Estate Leases. 12.15.06.doc Page 46 from the representation and the client of the former firm receives notice of the conflict and the screening mechanism. RPC RULE 1.13: ORGANIZATION AS However, prior to undertaking the representation, non- CLIENT disqualified firm members must evaluate the firm's ability to provide competent representation even if the disqualified (a) A lawyer employed or retained by an organization member can be screened in accordance with this Rule. While represents the Rule 1.10 does not specify the screening mechanism to be organization acting through its duly authorized constituents. used, the law firm must be able to demonstrate that it is adequate to prevent the personally disqualified lawyer from (b) If a lawyer for an organization knows that an officer, receiving or transmitting any confidential information or employee or from participating in the representation in any way. The other person associated with the organization is engaged in screening mechanism must be in place over the life of the action, intends representation at issue and is subject to judicial review at to act or refuses to act in a matter related to the the request of any of the affected clients, law firms, or representation that is lawyers. However, a lawyer or law firm may rebut the a violation of a legal obligation to the organization, or a presumption that information relating to the representation violation of has been transmitted by serving an affidavit describing the law that reasonably might be imputed to the organization, screening mechanism and affirming that the requirements of and that is the Rule have been met. likely to result in substantial injury to the organization, then the lawyer [11] Under Rule 5.3, this Rule also applies to nonlawyer shall proceed as is reasonably necessary in the best interest assistants and lawyers who previously worked as nonlawyers of the at a law firm. See Daines v. Alcatel, 194 F.R.D. 678 (E.D. organization. Unless the lawyer reasonably believes that it is Wash. 2000); Richard v. Jain, 168 F. Supp. 2d 1195 (W.D. not Wash. 2001). necessary in the best interest of the organization to do so, the lawyer [12] In serving an affidavit permitted by paragraph (e), a shall refer the matter to higher authority in the organization, lawyer may serve the affidavit on the former law firm alone including, (without simultaneously serving the former client directly) if warranted by the circumstances, to the highest authority if the former law firm continues to represent the former that can act on client and the lawyer contemporaneously requests in writing behalf of the organization as determined by applicable law. that the former law firm provide a copy of the affidavit to the former client. If the former client is no longer (c) Except as provided in paragraph (d), if represented by the former law firm or if the lawyer has reason to believe the former law firm will not promptly (1) despite the lawyer's efforts in accordance with provide the former client with a copy of the affidavit, then paragraph (b) the the affidavit must be served directly on the former client highest authority that can act on behalf of the organization also. Serving the affidavit on a represented former client insists does not violate Rule 4.2 because the communication with upon or fails to address in a timely and appropriate manner the an action, former client is not about the "subject of the or a refusal to act, that is clearly a violation of law, and representation" and the notice is "authorized . . . by law," i.e., the Rules of Professional Conduct. (2) the lawyer reasonably believes that the violation is reasonably [13] Rule 1.8(l) conflicts are not imputed to other certain to result in substantial injury to the organization, members of a firm under paragraph (a) of this Rule unless then the the relationship creates a conflict of interest for the lawyer may reveal information relating to the representation individual lawyer under Rule 1.7 and also presents a whether or significant risk of materially limiting the representation not Rule 1.6 permits such disclosure, but only if and to the of the client by the remaining lawyers in the firm. extent the lawyer reasonably believes necessary to prevent substantial injury to [Amended effective September 1, 2006.] the organization.

(d) Paragraph (c) shall not apply with respect to information relating c:strait/cle/18th Annual ‘Annual Adv. Conf on Commercial Real Estate Leases. 12.15.06.doc Page 47 to a lawyer's representation of an organization to investigate the governmental agency or unit; or an alleged violation of law, or to defend the organization or an officer, (2) the broader governmental entity gives the lawyer employee or timely written other constituent associated with the organization against a notice to the contrary, in which case the client shall be claim arising designated by out of an alleged violation of law. such entity. Notice under this subsection shall be given by the person (e) A lawyer who reasonably believes that he or she has designated by law as the chief legal officer of the broader been discharged governmental because of the lawyer's actions taken pursuant to paragraphs entity, or in the absence of such designation, by the chief (b) and (c), executive or who withdraws under circumstances that require or permit officer of the entity. the lawyer to take action under either of those paragraphs, shall proceed Comment as the lawyer The Entity as the Client reasonably believes necessary to assure that the [1] An organizational client is a legal entity, but it cannot act organization's highest except authority is informed of the lawyer's discharge or withdrawal. through its officers, directors, employees, shareholders and other (f) In dealing with an organization's directors, officers, constituents. Officers, directors, employees and shareholders employees, are the members, shareholders or other constituents, a lawyer shall constituents of the corporate organizational client. The duties explain the defined in identity of the client when the lawyer knows or reasonably this Comment apply equally to unincorporated associations. should know that "Other the organization's interests are adverse to those of the constituents" as used in this Comment means the positions constituents with equivalent to whom the lawyer is dealing. officers, directors, employees and shareholders held by persons acting for (g) A lawyer representing an organization may also organizational clients that are not corporations. represent any of its directors, officers, employees, members, shareholders or [2] When one of the constituents of an organizational client other communicates with the organization's lawyer in that person's constituents, subject to the provisions of Rule 1.7. If the organizational organization's capacity, the communication is protected by Rule 1.6. Thus, consent to the dual representation is required by Rule 1.7, by way of the consent example, if an organizational client requests its lawyer to shall be given by an appropriate official of the organization investigate other than allegations of wrongdoing, interviews made in the course of the individual who is to be represented, or by the that shareholders. investigation between the lawyer and the client's employees or other (h) For purposes of this Rule, when a lawyer who is not a constituents are covered by Rule 1.6. This does not mean, public officer however, that or employee represents a discrete governmental agency or constituents of an organizational client are the clients of the unit that is part lawyer. The of a broader governmental entity, the lawyer's client is the lawyer may not disclose to such constituents information particular relating to the governmental agency or unit represented, and not the representation except for disclosures explicitly or impliedly broader governmental authorized by entity of which the agency or unit is a part, unless: the organizational client in order to carry out the representation or as (1) otherwise provided in a written agreement between otherwise permitted by Rule 1.6. the lawyer and c:strait/cle/18th Annual ‘Annual Adv. Conf on Commercial Real Estate Leases. 12.15.06.doc Page 48 [3] When constituents of the organization make decisions necessary even if the lawyer has not communicated with the for it, the constituent. Any decisions ordinarily must be accepted by the lawyer even if measures taken should, to the extent practicable, minimize their utility the risk of or prudence is doubtful. Decisions concerning policy and revealing information relating to the representation to operations, persons outside the including ones entailing serious risk, are not as such in the organization. Even in circumstances where a lawyer is not lawyer's obligated by Rule province. Paragraph (b) makes clear, however, that when the 1.13 to proceed, a lawyer may bring to the attention of an lawyer knows organizational that the organization is likely to be substantially injured by client, including its highest authority, matters that the lawyer action of an reasonably officer or other constituent that violates a legal obligation to believes to be of sufficient importance to warrant doing so in the the best organization or is in violation of law that might be imputed to interest of the organization. the organization, the lawyer must proceed as is reasonably [5] Paragraph (b) also makes clear that when it is necessary in the reasonably necessary best interest of the organization. As defined in Rule 1.0(f), to enable the organization to address the matter in a timely knowledge can and be inferred from circumstances, and a lawyer cannot ignore appropriate manner, the lawyer must refer the matter to the obvious. higher authority, including, if warranted by the circumstances, the highest [4] In determining how to proceed under paragraph (b), the authority that lawyer should can act on behalf of the organization under applicable law. give due consideration to the seriousness of the violation and The its organization's highest authority to whom a matter may be consequences, the responsibility in the organization and the referred apparent ordinarily will be the board of directors or similar governing motivation of the person involved, the policies of the body. organization However, applicable law may prescribe that under certain concerning such matters, and any other relevant conditions the considerations. Ordinarily, highest authority reposes elsewhere, for example, in the referral to a higher authority would be necessary. In some independent circumstances, directors of a corporation. however, it may be appropriate for the lawyer to ask the constituent to Relation to Other Rules reconsider the matter; for example, if the circumstances [6] The authority and responsibility provided in this Rule are involve a concurrent with the authority and responsibility provided in constituent's innocent misunderstanding of law and other Rules. subsequent acceptance of In particular, this Rule does not limit or expand the lawyer's the lawyer's advice, the lawyer may reasonably conclude that responsibility under Rules 1.8, 1.16, 3.3 or 4.1. Paragraph (c) the best of this interest of the organization does not require that the matter Rule supplements Rule 1.6(b) by providing an additional basis be referred upon which to a higher authority. If a constituent persists in conduct the lawyer may reveal information relating to the contrary to the representation, but does lawyer's advice, it will be necessary for the lawyer to take not modify, restrict, or limit the provisions of Rule 1.6(b)(1)- steps to have (7). Under the matter reviewed by a higher authority in the organization. paragraph (c) the lawyer may reveal such information only If the when the matter is of sufficient seriousness and importance or urgency organization's highest authority insists upon or fails to to the address organization, referral to higher authority in the organization threatened or ongoing action that is clearly a violation of law, may be and then c:strait/cle/18th Annual ‘Annual Adv. Conf on Commercial Real Estate Leases. 12.15.06.doc Page 49 only to the extent the lawyer reasonably believes necessary obligations of such lawyers may be more difficult in the to prevent government context reasonably certain substantial injury to the organization. It is and is a matter beyond the scope of these Rules. See Scope not [18]. Although necessary that the lawyer's services be used in furtherance in some circumstances the client may be a specific agency, it of the may also be a violation, but it is required that the matter be related to the branch of government, such as the executive branch, or the lawyer's government as a representation of the organization. If the lawyer's services whole. For example, if the action or failure to act involves the are being used head of a by an organization to further a crime or fraud by the bureau, either the department of which the bureau is a part organization, Rules or the relevant 1.6(b)(2) and 1.6(b)(3) may permit the lawyer to disclose branch of government may be the client for purposes of this confidential Rule. Moreover, information. In such circumstances Rule 1.2(d) may also be in a matter involving the conduct of government officials, a applicable, in government which event, withdrawal from the representation under Rule lawyer may have authority under applicable law to question 1.16(a)(1) may such conduct be required. more extensively than that of a lawyer for a private organization in [7] Paragraph (d) makes clear that the authority of a lawyer similar circumstances. Thus, when the client is a to disclose governmental information relating to a representation in circumstances organization, a different balance may be appropriate described in between maintaining paragraph (c) does not apply with respect to information confidentiality and assuring that the wrongful act is relating to a prevented or lawyer's engagement by an organization to investigate an rectified, for public business is involved. In addition, duties of alleged violation lawyers of law or to defend the organization or an officer, employee employed by the government or lawyers in military service or other may be defined by person associated with the organization against a claim statutes and regulation. This Rule does not limit that arising out of an authority. See Scope. alleged violation of law. This is necessary in order to enable organizational clients to enjoy the full benefits of legal Clarifying the Lawyer's Role counsel in [10] There are times when the organization's interest may conducting an investigation or defending against a claim. be or become adverse to those of one or more of its constituents. In such [8] A lawyer who reasonably believes that he or she has circumstances been discharged the lawyer should advise any constituent, whose interest the because of the lawyer's actions taken pursuant to paragraph lawyer finds (b) or (c), or adverse to that of the organization of the conflict or potential who withdraws in circumstances that require or permit the conflict lawyer to take of interest, that the lawyer cannot represent such action under either of these paragraphs, must proceed as the constituent, and that lawyer such person may wish to obtain independent representation. reasonably believes necessary to assure that the Care must be organization's highest taken to assure that the individual understands that, when authority is informed of the lawyer's discharge or withdrawal. there is such adversity of interest, the lawyer for the organization cannot Government Agency provide legal [9] The duty defined in this Rule applies to governmental representation for that constituent individual, and that organizations. discussions Defining precisely the identity of the client and prescribing between the lawyer for the organization and the individual the resulting may not be privileged.

c:strait/cle/18th Annual ‘Annual Adv. Conf on Commercial Real Estate Leases. 12.15.06.doc Page 50 [11] Whether such a warning should be given by the lawyer for the RPC RULE 1.15A: SAFEGUARDING organization to any constituent individual may turn on the PROPERTY facts of each case. (a) This Rule applies to (1) property of clients or third Dual Representation persons in a [12] Paragraph (g) recognizes that a lawyer for an lawyer's possession in connection with a representation and organization may also (2) escrow and represent a principal officer or major shareholder. other funds held by a lawyer incident to the closing of any real estate or Derivative Actions personal property. [13] Under generally prevailing law, the shareholders or members of a (b) A lawyer must not use, convert, borrow or pledge client corporation may bring suit to compel the directors to perform or third their legal person property for the lawyer's own use. obligations in the supervision of the organization. Members of unincorporated associations have essentially the same right. (c) A lawyer must hold property of clients and third persons Such an action separate may be brought nominally by the organization, but usually is, from the lawyer's own property. in fact, a legal controversy over management of the organization. (1) A lawyer must deposit and hold in a trust account funds subject [14] The question can arise whether counsel for the to this Rule pursuant to paragraph (h) of this Rule. organization may defend such an action. The proposition that the organization (2) A lawyer must identify, label and appropriately is the safeguard any lawyer's client does not alone resolve the issue. Most property of clients or third persons other than funds. The derivative actions lawyer must are a normal incident of an organization's affairs, to be keep records of such property that identify the property, the defended by the client or organization's lawyer like any other suit. However, if the third person, the date of receipt and the location of claim involves safekeeping. The serious charges of wrongdoing by those in control of the lawyer must preserve the records for seven years after organization, a return of the property. conflict may arise between the lawyer's duty to the organization and the (d) A lawyer must promptly notify a client or third person of lawyer's relationship with the board. In those circumstances, receipt of the client or third person's property. Rule 1.7 governs who should represent the directors and the (e) A lawyer must promptly provide a written accounting to organization. a client or third person after distribution of property or upon request. A Additional Washington Comment (15) lawyer must provide at least annually a written accounting to a client or [15] Paragraph (h) was taken from former Washington RPC third person 1.7(c); it for whom the lawyer is holding property. addresses the obligations of a lawyer who is not a public officer or (f) Except as stated in this Rule, a lawyer must promptly pay employee but is representing a discrete governmental or agency or unit. deliver to the client or third person the property which the client or [Amended effective September 1, 2006.] third person is entitled to receive.

(g) If a lawyer possesses property in which two or more persons (one of

c:strait/cle/18th Annual ‘Annual Adv. Conf on Commercial Real Estate Leases. 12.15.06.doc Page 51 which may be the lawyer) claim interests, the lawyer must reconcile the check register balance to the combined total maintain the of all property in trust until the dispute is resolved. The lawyer client ledger records required by Rule 1.15B(a)(2). must promptly distribute all undisputed portions of the property. The lawyer (7) A lawyer must not disburse funds from a trust account must take until reasonable action to resolve the dispute, including, when deposits have cleared the banking process and been appropriate, collected, unless interpleading the disputed funds. the lawyer and the bank have a written agreement by which the lawyer (h) A lawyer must comply with the following for all trust personally guarantees all disbursements from the account accounts: without recourse to the trust account. (1) No funds belonging to the lawyer may be deposited or retained in (8) Disbursements on behalf of a client or third person a trust account except as follows: may not exceed the funds of that person on deposit. The funds of a (i) funds to pay bank charges, but only in an amount client or reasonably third person must not be used on behalf of anyone else. sufficient for that purpose; (9) Only a lawyer admitted to practice law may be an (ii) funds belonging in part to a client or third person and authorized in signatory on the account. part presently or potentially to the lawyer must be deposited and (i) Trust accounts must be interest-bearing and allow retained in a trust account, but any portion belonging to withdrawals or the lawyer transfers without any delay other than notice periods that are must be withdrawn at the earliest reasonable time; or required by law or regulation. In the exercise of ordinary prudence, a (iii) funds necessary to restore appropriate balances. lawyer may select any bank, savings bank, credit union or savings and (2) A lawyer must keep complete records as required by loan Rule 1.15B. association that is insured by the Federal Deposit Insurance Corporation (3) A lawyer may withdraw funds when necessary to pay or National Credit Union Administration, is authorized by law client costs. to do The lawyer may withdraw earned fees only after giving business in Washington and has filed the agreement required reasonable notice by ELC 15.4. to the client of the intent to do so, through a billing Trust account funds must not be placed in mutual funds, statement or stocks, bonds, or other document. similar investments.

(4) Receipts must be deposited intact. (1) When client or third-person funds will not produce a positive net (5) All withdrawals must be made only to a named payee return to the client or third person because the funds are and not to nominal in cash. Withdrawals must be made by check or by bank amount or expected to be held for a short period of time the transfer. funds must be placed in a pooled interest-bearing trust account known (6) Trust account records must be reconciled as often as as an bank Interest on Lawyer's Trust Account or IOLTA. The interest statements are generated or at least quarterly. The lawyer accruing on must the IOLTA account, net of reasonable check and deposit reconcile the check register balance to the bank statement processing balance and c:strait/cle/18th Annual ‘Annual Adv. Conf on Commercial Real Estate Leases. 12.15.06.doc Page 52 charges which may only include items deposited charge, paragraph (i)(2)(ii) is used. monthly maintenance fee, per item check charge, and per deposit (4) As to IOLTA accounts created under paragraph (i)(1), charge, must be lawyers or paid to the Legal Foundation of Washington. Any other fees law firms must direct the depository institution: and transaction costs must be paid by the lawyer. (i) to remit interest or dividends, net of charges authorized by (2) Client or third-person funds that will produce a positive paragraph (i)(1), on the average monthly balance in the net account, or return to the client or third person must be placed in one of as otherwise computed in accordance with an institution's the standard following unless the client or third person requests that the accounting practice, monthly, to the Legal Foundation of funds be Washington; deposited in an IOLTA account: (ii) to transmit with each remittance to the Foundation a (i) a separate interest-bearing trust account for the statement, on a form authorized by the Washington State particular Bar client or third person with earned interest paid to the Association, showing details about the account, including client or but not third person; or limited to the name of the lawyer or law firm for whom the remittance (ii) a pooled interest-bearing trust account with sub- is sent, the rate of interest applied, and the amount of accounting service that allows for computation of interest earned by each charges deducted, if any, and the balance used to client or compute the third person's funds with the interest paid to the interest, with a copy of such statement to be transmitted appropriate client to the or third person. depositing lawyer or law firm; and

(3) In determining whether to use the account specified in (iii) to bill fees and transaction costs not authorized by paragraph paragraph (i)(1) to the lawyer or law firm. (i)(1) or an account specified in paragraph (i)(2), a lawyer must (5) The provisions of paragraph (i) do not relieve a lawyer consider only whether the funds will produce a positive net or law return to firm from any obligation imposed by these Rules. the client or third person, as determined by the following factors: (j) The Legal Foundation of Washington must prepare an annual report to (i) the amount of interest the funds would earn based on the Supreme Court of Washington that summarizes the the Foundation's income, current rate of interest and the expected period of grants and operating expenses, implementation of its deposit; corporate purposes, and any problems arising in the administration of the (ii) the cost of establishing and administering the program established account, by paragraph (i) of this Rule. including the cost of the lawyer's services and the cost of preparing Washington Comments any tax reports required for interest accruing to a client or [1] A lawyer must also comply with the recordkeeping rule third for trust person's benefit; and accounts, Rule 1.15B.

(iii) the capability of financial institutions to calculate and [2] Client funds include, but are not limited to, the following: pay interest to individual clients or third persons if the legal account in c:strait/cle/18th Annual ‘Annual Adv. Conf on Commercial Real Estate Leases. 12.15.06.doc Page 53 fees and costs that have been paid in advance, funds deposited into the trust account and then transferred to received on behalf of another account. a client, funds to be paid by a client to a third party through the [9] Under paragraph (g), the extent of the efforts that a lawyer, other funds subject to attorney and other liens, and lawyer is payments obligated to take to resolve a dispute depend on the amount received in excess of amounts billed for fees. in dispute, the availability of methods for alternative dispute resolution, [3] This Rule applies to property held in any fiduciary and the capacity in likelihood of informal resolution. connection with a representation, whether as trustee, agent, escrow agent, [10] The requirement in paragraph (h)(4) that receipts must guardian, personal representative, executor, or otherwise. be deposited intact means that a lawyer cannot deposit one [4] The inclusion of ethical obligations to third persons in the check or handling of trust funds and property is not intended to negotiable instrument into two or more accounts at the same expand or time, commonly otherwise affect existing law regarding a Washington lawyer's known as a split deposit. liability to third parties other than clients. See, e.g., Trask v. Butler, 123 [11] Paragraph (h)(7) permits Washington lawyers to enter Wn.2d into written 835, 872 P.2d 1080 (1994); Hetzel v. Parks, 93 Wn. App. 929, agreements with the trust account financial institution to 971 P.2d 115 (1999). provide for disbursement of trust deposits prior to formal notice of [5] Property covered by this Rule includes original dishonor or documents affecting collection. In essence the trust account bank is agreeing to or legal rights such as wills or deeds. has guaranteed a loan to the lawyer and the client for the amount [6] A lawyer has a duty to take reasonable steps to locate a of the trust client or deposit pending collection of that deposit from the institution third person for whom the lawyer is holding funds or upon which property. If after the instrument was written. A Washington lawyer may only taking reasonable steps, the lawyer is still unable to locate enter into such the client an arrangement if 1) there is a formal written agreement or third person, the lawyer should treat the funds as between the unclaimed property attorney and the trust account institution, and 2) the trust under the Uniform Unclaimed Property Act, RCW 63.29. account financial institution provides the lawyer with written [7] A lawyer may not use as a trust account an account in assurance that in which funds the event of dishonor of the deposited instrument or other are periodically transferred by the bank between a trust difficulty in account and an collecting the deposited funds, the financial institution will uninsured account or other account that would not qualify as not have a trust recourse to the trust account to obtain the funds to reimburse account under this Rule. the financial institution. A lawyer must never use one client's [8] If a lawyer accepts payment of an advanced fee deposit money to pay by credit for withdrawals from the trust account on behalf of another card, the payment must be deposited directly into the trust client who is account. It paid subject to the lawyer's guarantee. The trust account cannot be deposited into a general account and then financial transferred to the institution must agree that the institution will not seek to trust account. Similarly, credit card payments of earned fees fund the cannot be guaranteed withdrawal from the trust account, but will instead look to the c:strait/cle/18th Annual ‘Annual Adv. Conf on Commercial Real Estate Leases. 12.15.06.doc Page 54 lawyer for payment of uncollectible funds. Any such (ii) the date on which trust funds were received, disbursed, agreement must ensure or transferred; that the trust account funds or deposits of any other client's or third (iii) the check number for each disbursement; person's money into the trust account would not be affected by the guarantee. (iv) the payor or payee for or from which trust funds were received, [12] The Legal Foundation of Washington was established by disbursed, or transferred; and Order of the Supreme Court of Washington. (v) the new trust account balance after each receipt, disbursement, or transfer; [13] A lawyer may, but is not required to, notify the client of the (2) Individual client ledger records containing either a intended use of funds paid to the Foundation. separate page for each client or an equivalent electronic record showing all [14] If the client or third person requests that funds that individual would be receipts, disbursements, or transfers, and also containing: deposited in a separate interest-bearing account instead be held in the (i) identification of the purpose for which trust funds were IOLTA account, the lawyer should document this request in received, disbursed, or transferred; the lawyer's trust account records and preferably should confirm the (ii) the date on which trust funds were received, disbursed request in writing or transferred; to the client or third person. (iii) the check number for each disbursement; [15] A lawyer may not receive from financial institutions earnings (iv) the payor or payee for or from which trust funds were credits or any other benefit from the financial institution received, based on the disbursed, or transferred; and balance maintained in a trust account. (v) the new client fund balance after each receipt, [Amended effective September 1, 2006.] disbursement, or transfer;

(3) Copies of any agreements pertaining to fees and costs;

RPC RULE 1.15B: REQUIRED (4) Copies of any statements or accountings to clients or TRUST ACCOUNT RECORDS third parties showing the disbursement of funds to them or on their behalf; (a) A lawyer must maintain current trust account records. They may be in (5) Copies of bills for legal fees and expenses rendered to electronic or manual form and must be retained for at least clients; seven years after the events they record. At minimum, the records must (6) Copies of invoices, bills or other documents supporting include the following: all disbursements or transfers from the trust account; (1) Checkbook register or equivalent for each trust account, including (7) Bank statements, copies of deposit slips, and cancelled entries for all receipts, disbursements, and transfers, and checks or containing at least: their equivalent;

(i) identification of the client matter for which trust funds (8) Copies of all trust account client ledger reconciliations; were and received, disbursed, or transferred;

c:strait/cle/18th Annual ‘Annual Adv. Conf on Commercial Real Estate Leases. 12.15.06.doc Page 55 (9) Copies of those portions of clients' files that are reasonably (2) fail to disclose a material fact to a tribunal when necessary for a complete understanding of the financial disclosure is transactions necessary to avoid assisting a criminal or fraudulent act by pertaining to them. the client unless such disclosure is prohibited by Rule 1.6; (b) Upon any change in the lawyer's practice affecting the trust account, (3) fail to disclose to the tribunal legal authority in the including dissolution or sale of a law firm or suspension or controlling jurisdiction known to the lawyer to be directly other change adverse to the in membership status, the lawyer must make appropriate position of the client and not disclosed by opposing counsel; arrangements for the or maintenance of the records specified in this Rule. (4) offer evidence that the lawyer knows to be false. Washington Comments (b) The duties stated in paragraph (a) continue to the [1] Paragraph (a)(3) is not intended to require that fee conclusion of the proceeding. agreements be in writing. That issue is governed by Rule 1.5. (c) If the lawyer has offered material evidence and comes to [2] If trust records are computerized, a system of regular know of its and frequent falsity, the lawyer shall promptly disclose this fact to the (preferably daily) back-up procedures is essential. tribunal unless such disclosure is prohibited by Rule 1.6. [3] Paragraph (a)(9) does not require a lawyer to retain the entire (d) If the lawyer has offered material evidence and comes to client file for a period of seven years, although many lawyers know of its will choose falsity, and disclosure of this fact is prohibited by Rule 1.6, to do so for other reasons. Rather, under this paragraph, the the lawyer lawyer must shall promptly make reasonable efforts to convince the client retain only those portions of the file necessary for a complete to consent understanding of the financial transactions. For example, if a to disclosure. If the client refuses to consent to disclosure, lawyer the lawyer received proceeds of a settlement on a client's behalf, the may seek to withdraw from the representation in accordance lawyer would with Rule 1.16. need to retain a copy of the settlement agreement. In many (e) A lawyer may refuse to offer evidence that the lawyer cases, there reasonably will be nothing in the client file that needs to be retained believes is false. other than the specific documents listed in paragraphs (a)(2)-(8). (f) In an ex parte proceeding, a lawyer shall inform the tribunal of all [Amended effective September 1, 2006.] material facts known to the lawyer that will enable the tribunal to make an informed decision, whether or not the facts are adverse.

RPC RULE 3.3: CANDOR TOWARD Comment THE TRIBUNAL [1] [Washington revision] This Rule governs the conduct of a lawyer who is representing a client in the proceedings of a tribunal. See (a) A lawyer shall not knowingly: Rule 1.0(m) for the definition of "tribunal." It also applies when the lawyer (1) make a false statement of fact or law to a tribunal or is fail to representing a client in an ancillary proceeding conducted correct a false statement of material fact or law previously pursuant to made to the the tribunal's adjudicative authority, such as a deposition. tribunal by the lawyer; c:strait/cle/18th Annual ‘Annual Adv. Conf on Commercial Real Estate Leases. 12.15.06.doc Page 56 [2] This Rule sets forth the special duties of lawyers as constitutes dishonesty toward the tribunal. A lawyer is not officers of required to the court to avoid conduct that undermines the integrity of make a disinterested exposition of the law, but must the recognize the adjudicative process. A lawyer acting as an advocate in an existence of pertinent legal authorities. Furthermore, as adjudicative stated in proceeding has an obligation to present the client's case with paragraph (a)(3), an advocate has a duty to disclose directly persuasive adverse force. Performance of that duty while maintaining authority in the controlling jurisdiction that has not been confidences of the disclosed by client, however, is qualified by the advocate's duty of candor the opposing party. The underlying concept is that legal to the argument is a tribunal. Consequently, although a lawyer in an adversary discussion seeking to determine the legal premises properly proceeding is applicable to the case. not required to present an impartial exposition of the law or to vouch for Offering Evidence the evidence submitted in a cause, the lawyer must not allow [5] [Reserved.] the tribunal to be misled by false statements of law or fact or evidence [6] If a lawyer knows that the client intends to testify falsely that the or lawyer knows to be false. wants the lawyer to introduce false evidence, the lawyer should seek to Representations by a Lawyer persuade the client that the evidence should not be offered. If [3] [Washington revision] An advocate is responsible for the pleadings and persuasion is ineffective and the lawyer continues to other documents prepared for litigation, but is usually not represent the required to client, the lawyer must refuse to offer the false evidence. If have personal knowledge of matters asserted therein, for only a litigation portion of a witness's testimony will be false, the lawyer may documents ordinarily present assertions by the client, or by call the someone on witness to testify but may not elicit or otherwise permit the the client's behalf, and not assertions by the lawyer. Compare witness to Rule 3.1. present the testimony that the lawyer knows is false. However, an assertion purporting to be on the lawyer's own knowledge, as [7] [Washington revision] The duties stated in paragraphs in an affidavit by the lawyer or in a statement in open court, (a) apply to may all lawyers, including defense counsel in criminal cases. In properly be made only when the lawyer knows the assertion some is true or jurisdictions other than Washington, however, courts have believes it to be true on the basis of a reasonably diligent required counsel inquiry. to present the accused as a witness or to give a narrative There are circumstances where failure to make a disclosure is statement if the the accused so desires, even if counsel knows that the equivalent of an affirmative misrepresentation. The obligation testimony or prescribed statement will be false. The obligation of the advocate under in Rule 1.2(d) not to counsel a client to commit or assist the the Rules of client in Professional Conduct is subordinate to such requirements. committing a fraud applies in litigation. Regarding See State v. compliance with Rule Berrysmith, 87 Wn. App. 268, 944 P.2d 397 (1997), review 1.2(d), see the Comment to that Rule. See also Comment [4] denied, 134 Wn.2d to Rule 8.4. 1008, 954 P.2d 277 (1998).

Legal Argument [8] The prohibition against offering false evidence only [4] Legal argument based on a knowingly false applies if the representation of law c:strait/cle/18th Annual ‘Annual Adv. Conf on Commercial Real Estate Leases. 12.15.06.doc Page 57 lawyer knows that the evidence is false. A lawyer's reasonable belief that Duration of Obligation evidence is false does not preclude its presentation to the [13] A practical time limit on the obligation to rectify false trier of fact. evidence A lawyer's knowledge that evidence is false, however, can be or false statements of law and fact has to be established. The inferred from conclusion the circumstances. See Rule 1.0(f). Thus, although a lawyer of the proceeding is a reasonably definite point for the should resolve termination of doubts about the veracity of testimony or other evidence in the obligation. A proceeding has concluded within the favor of the meaning of this Rule client, the lawyer cannot ignore an obvious falsehood. when a final judgment in the proceeding has been affirmed on appeal or the [9] [Reserved.] time for review has passed.

Remedial Measures Ex Parte Proceedings [10] [Reserved.] [14] Ordinarily, an advocate has the limited responsibility of presenting one side of the matters that a tribunal should [11] The disclosure of a client's false testimony can result in consider in grave reaching a decision; the conflicting position is expected to be consequences to the client, including not only a sense of presented betrayal but by the opposing party. However, in any ex parte proceeding, also loss of the case and perhaps a prosecution for perjury. such as an But the application for a temporary restraining order, there is no alternative is that the lawyer cooperate in deceiving the balance of court, thereby presentation by opposing advocates. The object of an ex subverting the truth-finding process which the adversary parte proceeding system is is nevertheless to yield a substantially just result. The judge designed to implement. See Rule 1.2(d). Furthermore, unless has an it is clearly affirmative responsibility to accord the absent party just understood that the lawyer will act upon the duty to disclose consideration. the The lawyer for the represented party has the correlative duty existence of false evidence, the client can simply reject the to make lawyer's disclosures of material facts known to the lawyer and that the advice to reveal the false evidence and insist that the lawyer lawyer keep reasonably believes are necessary to an informed decision. silent. Thus the client could in effect coerce the lawyer into being a Withdrawal party to fraud on the court. [15] [Washington revision] Normally, a lawyer's compliance with the duty Preserving Integrity of Adjudicative Process of candor imposed by this Rule does not require that the lawyer withdraw [12] [Washington revision] Lawyers have a special from the representation of a client whose interests will be or obligation to protect have been a tribunal against criminal or fraudulent conduct that adversely affected by the lawyer's disclosure. The lawyer undermines the may, however, be integrity of the adjudicative process, such as bribing, required by Rule 1.16(a) to seek permission of the tribunal to intimidating or withdraw if otherwise unlawfully communicating with a witness, juror, the lawyer's compliance with this Rule's duty of candor court official results in such an or other participant in the proceeding, unlawfully destroying extreme deterioration of the client-lawyer relationship that or the lawyer concealing documents or other evidence or failing to disclose can no longer competently represent the client. See also Rule information 1.16(b) for to the tribunal when required by law to do so. the circumstances in which a lawyer will be permitted to seek a tribunal's c:strait/cle/18th Annual ‘Annual Adv. Conf on Commercial Real Estate Leases. 12.15.06.doc Page 58 permission to withdraw. In connection with a request for [1] The procedure of the adversary system contemplates permission to that the evidence withdraw that is premised on a client's misconduct, a lawyer in a case is to be marshaled competitively by the contending may reveal parties. Fair information relating to the representation as permitted by competition in the adversary system is secured by Rule 1.6. prohibitions against destruction or concealment of evidence, improperly [Amended effective September 1, 2006.] influencing witnesses, obstructive tactics in discovery procedure, and the like.

RPC RULE 3.4: FAIRNESS TO [2] Documents and other items of evidence are often OPPOSING PARTY AND essential to establish a claim or defense. Subject to evidentiary COUNSEL privileges, the right of an opposing party, including the government, to obtain A lawyer shall not: evidence through discovery or subpoena is an important procedural right. The (a) unlawfully obstruct another party's access to evidence or exercise of unlawfully that right can be frustrated if relevant material is altered, alter, destroy or conceal a document or other material having concealed or potential destroyed. Applicable law in many jurisdictions makes it an evidentiary value. A lawyer shall not counsel or assist another offense to person to destroy material for purpose of impairing its availability in a do any such act; pending proceeding or one whose commencement can be foreseen. (b) falsify evidence, counsel or assist a witness to testify Falsifying evidence is also generally a criminal offense. falsely, or Paragraph (a) applies to evidentiary material generally, offer an inducement to a witness that is prohibited by law; including computerized information. Applicable law may permit a lawyer to take temporary possession of physical (c) knowingly disobey an obligation under the rules of a evidence of client crimes for the purpose of conducting a tribunal except limited examination that will not alter or destroy material for an open refusal based on an assertion that no valid characteristics of the evidence. In such a case, obligation exists; applicable law may require the lawyer to turn the evidence over to the (d) in pretrial procedure, make a frivolous discovery request police or other prosecuting authority, depending on the or fail to circumstances. make reasonably diligent effort to comply with a legally proper discovery [3] With regard to paragraph (b), it is not improper to pay a request by an opposing party; or witness's expenses or to compensate an expert witness on terms (e) in trial, allude to any matter that the lawyer does not permitted by law. The reasonably common law rule in most jurisdictions is that it is improper to believe is relevant or that will not be supported by admissible pay an evidence, occurrence witness any fee for testifying and that it is assert personal knowledge of facts in issue except when improper to pay an testifying as a expert witness a contingent fee. witness, or state personal opinion as to the justness of a cause, the [4] [Reserved.] credibility of a witness, the culpability of a civil litigant or the guilt Additional Washington Comment (5) or innocence of an accused. [5] Washington did not adopt Model Rule 3.4(f), which (f) [Reserved.] delineates circumstances in which a lawyer may request that a person Comment other than a c:strait/cle/18th Annual ‘Annual Adv. Conf on Commercial Real Estate Leases. 12.15.06.doc Page 59 client refrain from voluntarily giving information to another opposing party has proper objection where the combination party, of roles may because the Model Rule is inconsistent with Washington law. prejudice that party's rights in the litigation. A witness is See Wright v. required to Group Health Hospital, 103 Wn.2d 192, 691 P.2d 564 (1994). testify on the basis of personal knowledge, while an advocate Advising or is expected requesting that a person other than a client refrain from to explain and comment on evidence given by others. It may voluntarily not be clear giving information to another party may violate other Rules. whether a statement by an advocate-witness should be taken See, e.g., Rule 8.4(d). as proof or as an analysis of the proof. [Amended effective September 1, 2006.] [3] [Washington revision] To protect the tribunal, paragraph (a) prohibits a lawyer from simultaneously serving as advocate RPC RULE 3.7: LAWYER AS and necessary WITNESS witness except in those circumstances specified in paragraphs (a)(1) through (a)(4). Paragraph (a)(1) recognizes that if the (a) A lawyer shall not act as advocate at a trial in which the testimony will be lawyer is uncontested, the ambiguities in the dual role are purely likely to be a necessary witness unless: theoretical. Paragraph (a)(2) recognizes that where the testimony (1) the testimony relates to an uncontested issue; concerns the extent and value of legal services rendered in the action in which (2) the testimony relates to the nature and value of legal the testimony services is offered, permitting the lawyers to testify avoids the need rendered in the case; for a second trial with new counsel to resolve that issue. Moreover, in such (3) disqualification of the lawyer would work substantial a hardship on situation the judge has firsthand knowledge of the matter in the client; or issue; hence, there is less dependence on the adversary process to test the (4) the lawyer has been called by the opposing party and credibility the court of the testimony. rules that the lawyer may continue to act as an advocate; or [4] Apart from these two exceptions, paragraph (a)(3) (b) A lawyer may act as advocate in a trial in which another recognizes that a lawyer in balancing is required between the interests of the client and the lawyer's firm is likely to be called as a witness unless those of the precluded tribunal and the opposing party. Whether the tribunal is likely from doing so by Rule 1.7 or Rule 1.9. to be Comment misled or the opposing party is likely to suffer prejudice [1] Combining the roles of advocate and witness can depends on the prejudice the nature of the case, the importance and probable tenor of the tribunal and the opposing party and can also involve a lawyer's conflict of testimony, and the probability that the lawyer's testimony will interest between the lawyer and client. conflict with that of other witnesses. Even if there is risk of such Advocate-Witness Rule prejudice, in [2] The tribunal has proper objection when the trier of fact determining whether the lawyer should be disqualified, due may be regard must be confused or misled by a lawyer serving as both advocate and given to the effect of disqualification on the lawyer's client. It witness. The is

c:strait/cle/18th Annual ‘Annual Adv. Conf on Commercial Real Estate Leases. 12.15.06.doc Page 60 relevant that one or both parties could reasonably foresee "informed consent." that the lawyer would probably be a witness. The conflict of interest [7] Paragraph (b) provides that a lawyer is not disqualified principles stated in from Rules 1.7, 1.9 and 1.10 have no application to this aspect of serving as an advocate because a lawyer with whom the the problem. lawyer is associated in a firm is precluded from doing so by paragraph (a). If, [5] Because the tribunal is not likely to be misled when a however, the lawyer acts testifying lawyer would also be disqualified by Rule 1.7 or as advocate in a trial in which another lawyer in the lawyer's Rule 1.9 from firm will representing the client in the matter, other lawyers in the testify as a necessary witness, paragraph (b) permits the firm will be lawyer to do so precluded from representing the client by Rule 1.10 unless except in situations involving a conflict of interest. the client gives informed consent under the conditions stated in Rule Conflict of Interest 1.7. [6] [Washington revision] In determining if it is permissible to act as Additional Washington Comment (8) advocate in a trial in which the lawyer will be a necessary witness, the [8] When a lawyer is called to testify as a witness by the lawyer must also consider that the dual role may give rise to adverse a conflict party, there is a risk that Rule 3.7 is being inappropriately of interest that will require compliance with Rules 1.7 or 1.9. used as a For tactic to obtain disqualification of the lawyer. Paragraph (a) example, if there is likely to be substantial conflict between (4) is the intended to confer discretion on the tribunal in determining testimony of the client and that of the lawyer, the whether representation disqualification is truly warranted in such circumstances. The involves a conflict of interest that requires compliance with provisions Rule 1.7. of paragraph (a)(4) were taken from former Washington RPC This would be true even though the lawyer might not be 3.7(c). prohibited by [Amended effective September 1, 2006.] paragraph (a) from simultaneously serving as advocate and witness because the lawyer's disqualification would work a substantial hardship on the RPC RULE 4.1: TRUTHFULNESS IN client. Similarly, a lawyer who might be permitted to STATEMENTS TO OTHERS simultaneously serve as an advocate and a witness by paragraph (a)(3) or (a)(4) might be In the course of representing a client a lawyer shall not precluded from doing so by Rule 1.9. The problem can arise knowingly: whether the (a) make a false statement of material fact or law to a third lawyer is called as a witness on behalf of the client or is person; or called by the opposing party. Determining whether or not such a conflict (b) fail to disclose a material fact to a third person when exists is disclosure is primarily the responsibility of the lawyer involved. If there is a necessary to avoid assisting a criminal or fraudulent act by a conflict of interest, the lawyer must secure the client's client, informed unless disclosure is prohibited by Rule 1.6. consent, confirmed in writing. In some cases, the lawyer will be precluded Comment from seeking the client's consent. See Rule 1.7. See Rule Misrepresentation 1.0(b) for the [1] A lawyer is required to be truthful when dealing with definition of "confirmed in writing" and Rule 1.0(e) for the others on a definition of c:strait/cle/18th Annual ‘Annual Adv. Conf on Commercial Real Estate Leases. 12.15.06.doc Page 61 client's behalf, but generally has no affirmative duty to inform affirmation or the like. In extreme cases, substantive law may an require a opposing party of relevant facts. A misrepresentation can lawyer to disclose information relating to the representation occur if the to avoid lawyer incorporates or affirms a statement of another person being deemed to have assisted the client's crime or fraud. If that the the lawyer lawyer knows is false. Misrepresentations can also occur by can avoid assisting a client's crime or fraud only by disclosing partially true this but misleading statements or omissions that are the information, then under paragraph (b) the lawyer is required equivalent of to do so, affirmative false statements. For dishonest conduct that does unless the disclosure is prohibited by Rule 1.6. not amount to a false statement or for misrepresentations by a lawyer other [Amended effective September 1, 2006.] than in the course of representing a client, see Rule 8.4.

Statements of Fact RPC RULE 4.2: COMMUNICATION [2] This Rule refers to statements of fact. Whether a WITH PERSON REPRESENTED particular statement should be regarded as one of fact can depend on BY COUNSEL the circumstances. Under generally accepted conventions in In representing a client, a lawyer shall not communicate negotiation, certain about the types of statements ordinarily are not taken as statements of subject of the representation with a person the lawyer knows material to be fact. Estimates of price or value placed on the subject of a represented by another lawyer in the matter, unless the transaction lawyer has the and a party's intentions as to an acceptable settlement of a consent of the other lawyer or is authorized to do so by law or claim are a ordinarily in this category, and so is the existence of an court order. undisclosed principal except where nondisclosure of the principal would Comment constitute [1] This Rule contributes to the proper functioning of the fraud. Lawyers should be mindful of their obligations under legal applicable law system by protecting a person who has chosen to be to avoid criminal and tortious misrepresentation. represented by a lawyer in a matter against possible overreaching by other Crime or Fraud by Client lawyers who [3] Under Rule 1.2(d), a lawyer is prohibited from counseling are participating in the matter, interference by those lawyers or with assisting a client in conduct that the lawyer knows is criminal the client-lawyer relationship and the uncounselled disclosure or of fraudulent. Paragraph (b) states a specific application of the information relating to the representation. principle set forth in Rule 1.2(d) and addresses the situation where a [2] This Rule applies to communications with any person client's crime who is or fraud takes the form of a lie or misrepresentation. represented by counsel concerning the matter to which the Ordinarily, a lawyer communication relates. can avoid assisting a client's crime or fraud by withdrawing from the [3] The Rule applies even though the represented person representation. Sometimes it may be necessary for the initiates or lawyer to give notice consents to the communication. A lawyer must immediately of the fact of withdrawal and to disaffirm an opinion, terminate document, communication with a person if, after commencing communication, the c:strait/cle/18th Annual ‘Annual Adv. Conf on Commercial Real Estate Leases. 12.15.06.doc Page 62 lawyer learns that the person is one with whom communication is not [6] A lawyer who is uncertain whether a communication with permitted by this Rule. a represented person is permissible may seek a court order. A [4] This Rule does not prohibit communication with a lawyer may represented also seek a court order in exceptional circumstances to person, or an employee or agent of such a person, authorize a concerning matters communication that would otherwise be prohibited by this outside the representation. For example, the existence of a Rule, for controversy between a government agency and a private example, where communication with a person represented by party, or counsel is between two organizations, does not prohibit a lawyer for necessary to avoid reasonably certain injury. either from communicating with nonlawyer representatives of the other [7] [Washington revision] In the case of a represented regarding a organization, separate matter. Nor does this Rule preclude communication this Rule prohibits communications with a constituent of the with a organization who supervises, directs or regularly consults represented person who is seeking advice from a lawyer who with the is not organization's lawyer concerning the matter or has authority otherwise representing a client in the matter. A lawyer may to not make a obligate the organization with respect to the matter. Consent communication prohibited by this Rule through the acts of of the another. See organization's lawyer is not required for communication with Rule 8.4(a). Parties to a matter may communicate directly a former with each constituent. If a constituent of the organization is represented other, and a lawyer is not prohibited from advising a client in concerning a communication that the client is legally entitled the matter by his or her own counsel, the consent by that to counsel to a make. Also, a lawyer having independent justification or legal communication will be sufficient for purposes of this Rule. In authorization for communicating with a represented person is communicating with a current or former constituent of an permitted organization, to do so. a lawyer must not use methods of obtaining evidence that violate the [5] Communications authorized by law may include legal rights of the organization. See Rule 4.4. communications by a lawyer on behalf of a client who is exercising a constitutional [8] The prohibition on communication with a represented or person only other legal right to communicate with the government. applies in circumstances where the lawyer knows that the Communications person is in authorized by law may also include investigative activities of fact represented in the matter to be discussed. This means lawyers that the representing governmental entities, directly or through lawyer has actual knowledge of the fact of the investigative representation; but agents, prior to the commencement of criminal or civil such actual knowledge may be inferred from the enforcement circumstances. See Rule proceedings. When communicating with the accused in a 1.0(f). Thus, the lawyer cannot evade the requirement of criminal matter, obtaining the a government lawyer must comply with this Rule in addition consent of counsel by closing eyes to the obvious. to honoring the constitutional rights of the accused. The fact that a [9] In the event the person with whom the lawyer communication does not violate a state or federal communicates is not constitutional right known to be represented by counsel in the matter, the is insufficient to establish that the communication is lawyer's permissible communications are subject to Rule 4.3. under this Rule. c:strait/cle/18th Annual ‘Annual Adv. Conf on Commercial Real Estate Leases. 12.15.06.doc Page 63 Additional Washington Comments (10 - 11) lawyer knows or reasonably should know that the interests of such a [10] Comment [7] to Model Rule 4.2 was revised to conform person are or have a reasonable possibility of being in to conflict with Washington law. The phrase "or whose act or omission in the interests of the client. connection with the matter may be imputed to the organization for Comment purposes of [1] An unrepresented person, particularly one not civil or criminal liability" and the reference to Model Rule experienced in 3.4(f) dealing with legal matters, might assume that a lawyer is was deleted. Whether and how lawyers may communicate disinterested in loyalties or is a disinterested authority on the with employees of law an adverse party is governed by Wright v. Group Health even when the lawyer represents a client. In order to avoid a Hospital, 103 misunderstanding, a lawyer will typically need to identify the Wn.2d 192, 691 P.2d 564 (1984). See also Washington lawyer's client and, where necessary, explain that the client Comment [5] to has Rule 3.4. interests opposed to those of the unrepresented person. For misunderstandings that sometimes arise when a lawyer for [11] An otherwise unrepresented person to whom limited an representation is being provided or has been provided in organization deals with an unrepresented constituent, see accordance Rule 1.13(f). with Rule 1.2(c) is considered to be unrepresented for purposes of [2] The Rule distinguishes between situations involving this Rule unless the opposing lawyer knows of, or has been unrepresented persons whose interests may be adverse to provided those of the with, a written notice of appearance under which, or a written lawyer's client and those in which the person's interests are notice not in of time period during which, he or she is to communicate only conflict with the client's. In the former situation, the with the possibility limited representation lawyer as to the subject matter within that the lawyer will compromise the unrepresented person's the interests limited scope of the representation. (The provisions of this is so great that the Rule prohibits the giving of any advice, Comment apart were taken from former Washington RPC 4.2(b)). from the advice to obtain counsel. Whether a lawyer is giving impermissible advice may depend on the experience and [Amended effective September 1, 2006.] sophistication of the unrepresented person, as well as the setting in which the RPC RULE 4.3: DEALING WITH behavior and comments occur. This Rule does not prohibit a UNREPRESENTED PERSON lawyer from negotiating the terms of a transaction or settling a dispute with an In dealing on behalf of a client with a person who is not unrepresented person. So long as the lawyer has explained represented by counsel, a lawyer shall not state or imply that that the the lawyer represents an adverse party and is not representing lawyer is disinterested. When the lawyer knows or the person, reasonably should the lawyer may inform the person of the terms on which the know that the unrepresented person misunderstands the lawyer's lawyer's role in client will enter into an agreement or settle a matter, prepare the matter, the lawyer shall make reasonable efforts to documents that require the person's signature and explain correct the the lawyer's misunderstanding. The lawyer shall not give legal advice to own view of the meaning of the document or the lawyer's an view of the unrepresented person, other than the advice to secure underlying legal obligations. counsel, if the

c:strait/cle/18th Annual ‘Annual Adv. Conf on Commercial Real Estate Leases. 12.15.06.doc Page 64 Additional Washington Comments (3 - 4) impractical to catalogue all such rights, but they include legal restrictions on methods of obtaining evidence from third [3] An otherwise unrepresented person to whom limited persons and representation unwarranted intrusions into privileged relationships, such as is being provided or has been provided in accordance with the client- Rule 1.2(c) lawyer relationship. is considered to be unrepresented for purposes of this Rule unless the [2] Paragraph (b) recognizes that lawyers sometimes opposing lawyer knows of, or has been provided with, a receive documents written notice that were mistakenly sent or produced by opposing parties or of appearance under which, or a written notice of time period their during lawyers. If a lawyer knows or reasonably should know that which, he or she is to communicate only with the limited such a document representation lawyer as to the subject matter within the was sent inadvertently, then this Rule requires the lawyer to limited promptly scope of the representation. (The provisions of this Comment notify the sender in order to permit that person to take were protective taken from former Washington RPC 4.3(b)). measures. Whether the lawyer is required to take additional [4] Government lawyers are frequently called upon by steps, such as unrepresented returning the original document, is a matter of law beyond persons, and in some instances by the courts, to provide the scope of general these Rules, as is the question of whether the privileged information on laws and procedures relating to claims against status of a the document has been waived. Similarly, this Rule does not government. The provision of such general information by address the legal government duties of a lawyer who receives a document that the lawyer lawyers is not a violation of this Rule. knows or reasonably should know may have been wrongfully obtained [Amended effective September 1, 2006.] by the sending person. For purposes of this Rule, "document" includes e-mail or other RPC RULE 4.4: RESPECT FOR electronic modes of transmission subject to being read or put RIGHTS OF THIRD PERSON into readable form. (a) In representing a client, a lawyer shall not use means [3] Some lawyers may choose to return a document unread, that have no for example, substantial purpose other than to embarrass, delay, or when the lawyer learns before receiving the document that it burden a third was person, or use methods of obtaining evidence that violate the inadvertently sent to the wrong address. Where a lawyer is legal rights not required by of such a person. applicable law to do so, the decision to voluntarily return such a (b) A lawyer who receives a document relating to the document is a matter of professional judgment ordinarily representation of reserved to the the lawyer's client and knows or reasonably should know that lawyer. See Rules 1.2 and 1.4. the document [Amended effective September 1, 2006.] was inadvertently sent shall promptly notify the sender.

Comment [1] Responsibility to a client requires a lawyer to RPC RULE 8.3: REPORTING subordinate the interests of others to those of the client, but that PROFESSIONAL MISCONDUCT responsibility does not imply that a lawyer may disregard the rights of third persons. It is c:strait/cle/18th Annual ‘Annual Adv. Conf on Commercial Real Estate Leases. 12.15.06.doc Page 65 (a) A lawyer who knows that another lawyer has committed a violation of (g) commit a discriminatory act prohibited by state law on the Rules of Professional Conduct that raises a substantial the basis of question as sex, race, age, creed, religion, color, national origin, to that lawyer's honesty, trustworthiness or fitness as a disability, sexual lawyer in other orientation, or marital status, where the act of discrimination respects, should inform the appropriate professional is authority. committed in connection with the lawyer's professional activities. In (b) A lawyer who knows that a judge has committed a addition, it is professional misconduct to commit a violation of discriminatory act on applicable rules of judicial conduct that raises a substantial the basis of sexual orientation if such an act would violate question this Rule when as to the judges fitness for office should inform the committed on the basis of sex, race, age, creed, religion, appropriate authority. color, national origin, disability, or marital status. This Rule shall not limit (c) This Rule does not permit a lawyer to report the the professional ability of a lawyer to accept, decline, or withdraw from the misconduct of another lawyer or a judge to the appropriate representation authority if of a client in accordance with Rule 1.16; doing so would require the lawyer to disclose information otherwise (h) in representing a client, engage in conduct that is protected by Rule 1.6. prejudicial to the administration of justice toward judges, other parties and/or their counsel, witnesses and/or their counsel, jurors, or court RPC RULE 8.4: MISCONDUCT personnel or officers, that a reasonable person would interpret as It is professional misconduct for a lawyer to: manifesting prejudice or bias on the basis of sex, race, age, creed, religion, color, (a) violate or attempt to violate the Rules of Professional national Conduct, origin, disability, sexual orientation, or marital status. This knowingly assist or induce another to do so, or do so through Rule does the acts of another; not restrict a lawyer from representing a client by advancing material (b) commit a criminal act that reflects adversely on the factual or legal issues or arguments. lawyer's honesty, trustworthiness or fitness as a lawyer in other (i) commit any act involving moral turpitude, or corruption, respects; or any unjustified act of assault or other act which reflects disregard (c) engage in conduct involving dishonesty, fraud, deceit or for the misrepresentation; rule of law, whether the same be committed in the course of his or her (d) engage in conduct that is prejudicial to the conduct as a lawyer, or otherwise, and whether the same administration of justice; constitutes a felony or misdemeanor or not; and if the act constitutes a (e) state or imply an ability to influence improperly a felony or government misdemeanor, conviction thereof in a criminal proceeding agency or official or to achieve results by means that violate shall not be a the Rules of condition precedent to disciplinary action, nor shall acquittal Professional Conduct or other law; or dismissal thereof preclude the commencement of a (f) knowingly assist a judge or judicial officer in conduct disciplinary proceeding; that is a violation of applicable rules of judicial conduct or other law; c:strait/cle/18th Annual ‘Annual Adv. Conf on Commercial Real Estate Leases. 12.15.06.doc Page 66 (j) willfully disobey or violate a court order directing him or beyond those of other citizens. A lawyer's abuse of public her to office can do or cease doing an act which he or she ought in good faith suggest an inability to fulfill the professional role of lawyers. to do or forbear; The same is true of abuse of positions of private trust such as trustee, (k) violate his or her oath as an attorney; executor, administrator, guardian, agent and officer, director or (l) violate a duty or sanction imposed by or under the manager of a Rules for corporation or other organization. Enforcement of Lawyer Conduct in connection with a disciplinary matter; Additional Washington Comment (6) including, but not limited to, the duties catalogued at ELC 1.5; [6] Paragraphs (g) ? (n) were taken from former Washington RPC 8.4 (as amended in 2002). (m) violate the Code of Judicial Conduct; or [Amended effective October 1, 2002; September 1, 2006.] (n) engage in conduct demonstrating unfitness to practice law. Comment [1] [Washington revision] Lawyers are not required to report Comment the [1] Lawyers are subject to discipline when they violate or misconduct of other lawyers or judges. Self-regulation of the attempt to legal violate the Rules of Professional Conduct, knowingly assist or profession, however, creates an aspiration that members of induce the profession another to do so or do so through the acts of another, as report misconduct to the appropriate disciplinary authority when they request when they or instruct an agent to do so on the lawyer's behalf. know of a serious violation of the Rules of Professional Paragraph (a), Conduct. Lawyers however, does not prohibit a lawyer from advising a client have a similar aspiration with respect to judicial misconduct. concerning An action the client is legally entitled to take. apparently isolated violation may indicate a pattern of misconduct that [2] [Reserved.] only a disciplinary investigation can uncover. Reporting a violation is [3] [Washington revision] Legitimate advocacy respecting especially important where the victim is unlikely to discover the factors set the offense. forth in paragraph (h) does not violate paragraphs (d) or (h). A trial [2] [Reserved.] judge's finding that peremptory challenges were exercised on a [3] [Washington revision] While lawyers are not obliged to discriminatory basis does not alone establish a violation of report every this Rule. violation of the Rules, the failure to report a serious violation may [4] A lawyer may refuse to comply with an obligation undermine the belief that lawyers should be a self-regulating imposed by law upon profession. a good faith belief that no valid obligation exists. The A measure of judgment is, therefore, required in deciding provisions of Rule whether to 1.2(d) concerning a good faith challenge to the validity, report a violation. The term "substantial" refers to the scope, meaning or seriousness of application of the law apply to challenges of legal regulation the possible offense and not the quantum of evidence of of the which the lawyer practice of law. is aware. A report should be made whenever a lawyer's conduct raises a [5] Lawyers holding public office assume legal serious question as to the honesty, trustworthiness or fitness responsibilities going to c:strait/cle/18th Annual ‘Annual Adv. Conf on Commercial Real Estate Leases. 12.15.06.doc Page 67 practice. Similar considerations apply to the reporting of judicial misconduct.

[4] [Washington revision] This Rule does not apply to a lawyer retained to represent a lawyer whose professional conduct is in question. Such a situation is governed by the Rules applicable to the client- lawyer relationship.

[5] [Washington revision] Information about a lawyer's or judge's misconduct or fitness may be received by a lawyer in the course of that lawyer's participation in an approved lawyers or judges assistance program. In that circumstance, there is no requirement or aspiration of reporting. Admission to Practice Rule 19(b) makes confidential communications between lawyer-clients and staff or peer counselors of the Lawyers' Assistance Program (LAP) of the WSBA privileged. Likewise, Discipline Rule for Judges 14(e) makes confidential communications between judges and peer counselors and the Judicial Assistance Committees of the various judges associations or the LAP of the WSBA privileged. Lawyers and judges should not hesitate to seek assistance from these programs and to help prevent additional harm to their professional careers and additional injury to the welfare of clients and the public.

[Amended effective September 1, 2006.]

c:strait/cle/18th Annual ‘Annual Adv. Conf on Commercial Real Estate Leases. 12.15.06.doc Page 68 THE HYPOTHETICALS

HYPOTHETICAL # 1 Three individuals have approached you to help them start a new corporation to invest in real estate. Two of the individuals will provide capital; the third will provide title to Blackacres. In addition, the three would like to obtain a bank loan in the sum of one million dollars ($1,000,000).

A. May you, on their collective behalf, form the corporation and help them get the bank loan? Who is your client?

B. Under what circumstances, if any, may you thereafter represent this new corporation in preparing employment agreements for the three (3) individuals?

C. Under what circumstances, if any, may you thereafter represent the corporation in having one of the shareholders removed as a director?

D. Should you send a disclosure and consent letter? When and to whom? What should it say?

E. One of the investors wants to lease the first property purchased by the corporation. Can you do the lease?

HYPOTHETICAL # 2 Jane Tort is representing Chris in a real estate lease/purchase. During the course of the representation, Jane develops an attraction to Chris, which is reciprocated. The two become close and decide to begin living together.

 Is this ethical?

HYPOTHETICAL #3 Your client buys real estate loans from the government and resells them to third parties. On previous occasions on which you have represented the client, the purchasers operated under the correct assumption that in reselling the loans, the client did not mark up the purchase price for the loan, but only charged a finder’s fee. The client now comes to you and tells you that with respect to a current transaction, he was able to obtain a better deal from the government than the documents would indicate. He would like not only to charge his usual finder’s fee but also to keep the difference between the price for which he purchased the loans and the actual purchase price.

A. Under what circumstances may you assist your client in completing the transaction as the client wishes?

c:strait/cle/18th Annual ‘Annual Adv. Conf on Commercial Real Estate Leases. 12.15.06.doc Page 69 B. What may you do if the client will not agree to disclose the fact that he is obtaining an additional benefit?

HYPOTHETICAL #4 You are an associate answering discovery requests from your opponent who is challenging the adequacy of the environment impact statement your client prepared and based the lease rate upon. An interrogatory states:

“Is the property contaminated with any toxins? If so, identify each substance and its concentration level.”

You are aware of a study which reveals the presence of creosote at varying levels throughout the site. The country code defines “toxin” as a list of specific substances which does not include creosote. Creosote is classified as an irritant. You seek the advice of the partner responsible for the case. He says, “What’s the issue? Answer the question that’s asked. The answer is no.”

 What will you do? Consider: RPC 3.4(c) 5.2 WA ST Phys. Ins. Exchange v. Fisons Corp., 122 Wn2d 299 (1993).

HYPOTHETICAL #5 Your client indicates that they are “cash poor,” cannot afford to pay for your services, and offers you an ownership in the transaction/enterprise/IPO/syndication, etc. if you will not charge directly with your fees but be paid by your equity interests.

 Should you do this?

HYPOTHETICAL #6 Although you were originally retained on an hourly fee arrangement, your firm has built up a substantial amount of past due attorney fees from your client and your client offers you a security interest and/or a property/share interest in the form of stock, etc. in lieu of the outstanding fees under your fee agreement.

 Can you take this?  Should you take this?  What are the risks?

c:strait/cle/18th Annual ‘Annual Adv. Conf on Commercial Real Estate Leases. 12.15.06.doc Page 70

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