Oklahoma Bar Journal
ORPC 1.8 Current Clients: Specific Conflict Rule
By Richard Stevens
As I have written often, most inquiries I receive are about conflicts of interest. Commonly, the conflicts are concurrent conflicts or former client conflicts. Often, the issue is one of imputation. Rarely, the question involves current or former government lawyers or former judges and other third-party neutrals. Even less often, the potential conflict is one that is specified in ORPC 1.8. Most lawyers seek to avoid these specific conflict situations even if there is a possibility the conflict situation may be cured. This conservative course is most often best
WHY SPECIFIC RULES?
Some situations are so fraught with the possibility of overreaching and self-dealing that the rules prohibit representation unless the lawyer meets the requirements of ORPC 1.8(a). For example, a lawyer entering into a business transaction with a client must 1) fully disclose and transmit in an understandable writing the transaction, which must be fair and reasonable to the client, 2) the client must be advised of the desirability of seeking independent legal counsel and be afforded an opportunity to do so and 3) the client must give written informed consent to the essential terms of the transaction, the lawyer's role in the transaction, including whether the lawyer is representing the client, and the transaction.
Other situations are prohibited entirely because the risk of overreaching and self-dealing is too great. A lawyer may not solicit any substantial gift from a client, including testamentary gifts, and a lawyer may not prepare an instrument on behalf of a client who gives a substantial gift to the lawyer or a person related to the lawyer unless the lawyer is related to the client. This rule defines “related persons” as a spouse, child, grandchild, parent, grandparent or another relative. Also, a lawyer may not negotiate an agreement giving the lawyer literary or media rights based in substantial part on information relating to the representation until after the representation is concluded. Lawyers may not provide financial assistance to a client in connection with pending or contemplated litigation except advancing court costs and expenses of litigation that are contingent on the outcome of the matter or paying court costs and expenses of litigation on behalf of an indigent client.
A SPECIFIC RULE FOR MALPRACTICE LIABILITY
Lawyers may not accept compensation for representing a client from someone other than the client unless the client gives informed consent, there is no interference with the lawyer’s independence and professional judgment and confidential information is protected. Lawyers also may not settle the claims or cases of two or more clients unless each client gives informed consent in writing. Lawyers also may not prospectively limit liability for malpractice. Nor may a lawyer settle a claim with an unrepresented client or former client unless that person is advised of the desirability of seeking independent legal counsel and given a reasonable opportunity to do so.
OTHER SPECIFIC RULES
Lawyers are prohibited from acquiring a proprietary interest in the subject matter of the litigation except for a lien to secure fees and expenses or a reasonable contingent fee in a civil case. Lawyers are also prohibited from sexual relationships with clients unless that consensual sexual relationship existed when the lawyer-client relationship began, and the relationship does not violate ORPC 1.7 (a)(2). The prohibitions of paragraphs (a) through (i) are imputed to all members of a firm.
Lawyers should be fully aware of the specific rules in ORPC 1.8 in order to avoid the consequences of violating the rules or failing to cure a curable conflict.
OKLAHOMA RULES OF PROFESSIONAL CONDUCT
CHAPTER 1, APP. 3-A
RULE 1.8. CONFLICT OF INTEREST: CURRENT CLIENTS: SPECIFIC RULES
(a) A lawyer shall not enter into a business transaction with a client or knowingly acquire an ownership, possessory, security or other pecuniary interest adverse to a client unless:
(1) the transaction and terms on which the lawyer acquires the interest are fair and reasonable to the client and are fully disclosed and transmitted in writing to the client in a manner that can be reasonably understood by the client;
(2) the client is advised in writing of the desirability of seeking and is given a reasonable opportunity to seek the advice of independent legal counsel on the transaction; and
(3) the client gives informed consent, in a writing signed by the client, to the essential terms of the transaction and the lawyer’s role in the transaction, including whether the lawyer is representing the client in the transaction.
(b) A lawyer shall not use information relating to representation of a client to the disadvantage of the client unless the client gives informed consent, except as permitted or required by these Rules.
(c) A lawyer shall not solicit any substantial gift from a client, including a testamentary gift, for the lawyer or a person related to the lawyer. Nor shall the lawyer prepare on behalf of a client an instrument giving the lawyer or a person related to the lawyer any substantial gift unless the lawyer or other recipient of the gift is related to the client. For purposes of this paragraph, related persons include a spouse, child, grandchild, parent, grandparent or other relative.
(d) Prior to the conclusion of representation of a client, a lawyer shall not make or negotiate an agreement giving the lawyer literary or media rights to a portrayal or account based in substantial part on information relating to the representation.
(e) A lawyer shall not provide financial assistance to a client in connection with pending or contemplated litigation, except that:
(1) a lawyer may advance court costs and expenses of litigation, the repayment of which may be contingent on the outcome of the matter; and
(2) a lawyer representing an indigent client may pay court costs and expenses of litigation on behalf of the client.
(f) A lawyer shall not accept compensation for representing a client from one other than the client unless:
(1) the client gives informed consent;
(2) there is no interference with the lawyer's independence of professional judgment or with the client-lawyer relationship; and
(3) information relating to representation of a client is protected as required by Rule 1.6.
(g) A lawyer who represents two or more clients shall not participate in making an aggregate settlement of the claims of or against the clients, or in a criminal case an aggregated agreement as to guilty or nolo contendere pleas, unless each client gives informed consent, in a writing signed by the client. The lawyer’s disclosure shall include the existence and nature of all the claims or pleas involved and of the participation of each person in the settlement.
(h) A lawyer shall not:
(1) make an agreement prospectively limiting the lawyer's liability to a client for malpractice; or
(2) settle a claim or potential claim for such liability with an unrepresented client or former client unless that person is advised in writing of the desirability of seeking and is given a reasonable opportunity to seek the advice of independent legal counsel in connection therewith.
(i) A lawyer shall not acquire a proprietary interest in the cause of action or subject matter of litigation the lawyer is conducting for a client, except that the lawyer may:
(1) acquire a lien authorized by law or contract to secure the lawyer's fee or expenses; and
(2) contract with a client for a reasonable contingent fee in a civil case.
(j) A lawyer shall not have sexual relations with a client unless: (1) a consensual sexual relationship existed between them when the client-lawyer relationship commenced and (2) the relationship does not result in a violation of Rule 1.7(a)(2).
(k) While lawyers are associated in a firm, a prohibition in the foregoing paragraphs (a) through (i) that applies to any one of them shall apply to all of them.
Additional information on ORPC 1.8 can be found at http://bit.ly/3EGbwLB.
ABOUT THE AUTHOR
Richard Stevens has served as OBA ethics counsel since September 2019. Previously, he was a solo practitioner following his retirement from the District 21 District Attorney’s Office after 33 years as a prosecutor. Mr. Stevens is a member of the OBA Criminal Law Section and the Rules of Professional Conduct Committee. He served as the 2018 OBA vice president, on the Board of Governors from 2013 to 2015 and as a member of the Professional Responsibility Commission.
Originally published in the Oklahoma Bar Journal – OBJ 93 Vol 10 (December 2022)