3.09 Special Client Relationships

Question 1

Client with Diminished Capacity

Answer 1

Really Strong Default to Maintain a Normal Relationship with the Client

Be Sensitive to Confidentiality, But Consider Implied Authority to Advance Purposes of Representation

There are Situations When Action is Required on Behalf of Client with Diminished Capacity

Question 2

Acting on Behalf of Client with Diminished Capacity

Answer 2

Reasonable Belief (Not Actual Knowledge)

1. Diminished Capacity
2. Risk of Substantial Physical, Financial, or Other Harm Unless Action is Taken AND
3. Cannot Act in Clients Own Interests

Question 3

REASONABLY NECESSARY

Answer 3

Protective Action
“Minimizing Impact on Clients Autonomy
(1) Act as an Advisor, Explaining Consequences, Etc.
(2) Get Consent and Discuss with Others
Only once you have done everything else and the risks are high enough, do you go to the formal steps of protective action.

Protective Action COULD Include:Consulting with Family Members; Using a Reconsideration Period; Using Voluntary Surrogate Decision Making Tools”

Question 4

ORGANIZATIONAL CLIENT

Answer 4

Lawyer Represents the Entity NOT Any of the Constituents (Including the Agents of the Entity)

However, this does not mean the lawyer does not represent the constituents of the entity outside of the entity.

Lawyer should report to / consult with the appropriate agents of the entity

Lawyer owes deference to and accept the decisions of authorized agents, but lawyer MUST proceed as reasonably necessary for best interest of the organization.

Question 5

Lawyers job is to help the organization.

Answer 5

First, step is to consult directly with the agent discussing taking the action with you | Objective is to Stay Within Normal Relationships as Much as Possible

Second, not everything needs to go up the ladder

NOTE: Reiterating the Lawyeräó»s Role as Agent of the Entity (Lawyers Job is to Ensure the Other Agents are Doing Their Jobs)

Question 6

RULE, Trigger for Action within Entity:

Answer 6

1. Actual Knowledge
2. Intention to Act, Engaged in Act, Refuses to Act that is Wrongful Related to the Organization
3. Related to the Lawyers Representation = Required to Report
4. Unrelated to Lawyers Representation = Permissive Reporting
5. w/n Agents Fiduciary Capacity
6. Likely to Result in Harm to Organization SHALL REFER Matter to Higher Authority in Organization
   - Want to Take It No Higher Than It Needs to Go
   - MUST Take It Where It Will Be Addressed

Question 7

Disclosures Outside the Entitys Highest Authorities / Agents, IF

Answer 7

1. Highest Authority, Insists Upon or Fails to Address
2. Violation of Law AND
3. Lawyer Reasonably Believes Violation is REASONABLY CERTAIN (Higher Standard than for Reporting Within Org.) Substantial Harm to the Organization will Result =

MAY (Permissive) to the EXTENT REASONABLY Necessary to Prevent Substantial Injury, DOES NOT Preclude (In Addition To) Disclosure Under 1.6(b)(1) for Protection of Others

Question 8

DUTY OF INQUIRY IN SECURITIES CASES

Answer 8

How do you know what the facts are as you begin your representation / preparation of disclosure documents?

“Job is to Ask Questions and Receive Answers - Generally, Can Accept Answers Receivedo If Answers Do Not Seem Right
- Charged with Investigating Additional FactsDuty is Less When Past Relationship Sufficient to Give Basis for TrustingDuty is Less When Answers Are Full and NO Reluctance to Answer”

Question 9

DUTY OF INQUIRY IN SECURITIES CASES

Disclosure Permitted in Connection to Crime or Fraud

Answer 9

Second Circuit has allowed lawyers to go in and report prior to SEC filing charges against the entity.

Question 10

DUTY OF INQUIRY IN SECURITIES CASES Disclosure Requirements

Answer 10

“Evidence of Material Violation,

SHALL Report= To Chief Legal Officer, CEO, or BothMaterial Violation

• Breach of Securities Law
• Breach of State or Federal Fiduciary LawEvidence
• Credible
• Unreasonable for Prudent and Competent Lawyer (Aggressive Obligation)
• Not to Conclude Reasonably Likely Material Violation Has Occurred

CHIEF LEGAL OFFICER THEN REQUIRED
-Appropriate Inquiry, Notify Reporting Attorney of Results, and Take or Ensure Appropriate Precautions are Taken

REPORTING ATTORNEY

• If there is not an appropriate response from the Chief Legal Officer
• SHALL REPORT to Audit Committee, Independent Directors OR Issuers Board of Directors”

Question 11

Limitations on Going Outside the Organization

Answer 11

Ability to Go Outside Organization DOES NOT Extent to Representation of Organization in Internal Investigation

Question 12

Reasonably Believes Discharged or Forced to Withdraw B/C of Investigation =

Answer 12

Report to Highest Authority in Organization= Affirmative Obligation and Strong Leverage to Get Client to Behave Properly

Question 13

Duties to Organizational Agents

Answer 13

SHALL Explain to the Agents of the Organization Who Your Client Is (the Entity) when Know or Reasonably Should Know Organizations Interest are Adverse

MAY ALSO Represent the Agents of the Organization, Subject to Conflicts of Interest and Informed Consent

DUTIES UNDER RULE Apply to Government Lawyers, though Government Lawyers may have additional obligations.