NYLE Professional Responsibility 2 — Questions and Answers
Question 1: An attorney represents a corporate client and learns during the representation that a mid-level manager is committing fraud that will harm investors. The manager refuses to stop. Under the NY Rules of Professional Conduct, what must the attorney do first?
- Immediately report the fraud to the SEC
- Refer the matter to higher authority within the corporation (Correct answer)
- Withdraw from representation without explanation
- Disclose the fraud to the affected investors
Correct answer: Refer the matter to higher authority within the corporation
Under NY RPC 1.13, when an attorney knows a constituent is acting illegally and the organization may be harmed, the attorney must refer the matter up the corporate chain before taking external action.
Question 2: A New York attorney charges a contingency fee in a matrimonial action for property division. Under the NY Rules of Professional Conduct, this fee arrangement is:
- Permissible if the client gives informed consent in writing
- Permissible for property division but not alimony
- Prohibited entirely in matrimonial actions (Correct answer)
- Permissible if the fee does not exceed one-third of the recovery
Correct answer: Prohibited entirely in matrimonial actions
NY RPC 1.5(d) expressly prohibits contingency fees in domestic relations matters, unlike some other jurisdictions that allow them in limited circumstances.
Question 3: Attorney A previously represented Client X in a matter. Client Y, whose interests are materially adverse to X in a substantially related matter, now wants to retain Attorney B, who is in A's firm. Attorney A is screened and receives no part of the fee. Under NY RPC 1.10, is Attorney B disqualified?
- Yes, A's conflict is imputed to B under RPC 1.10(a); a screen does not cure it unless former Client X gives informed consent, confirmed in writing (Correct answer)
- No, because timely screening prevents imputation under NY RPC 1.10
- No, because only Attorney A is disqualified
- Yes, unless Client Y provides written consent
Correct answer: Yes, A's conflict is imputed to B under RPC 1.10(a); a screen does not cure it unless former Client X gives informed consent, confirmed in writing
RPC 1.10(a) imputes a conflict of any lawyer in a firm to all lawyers in the firm. Unlike the ABA Model Rules, the New York Rules do not provide a general screening exception for a former-client conflict under Rule 1.9 (screening appears only in specific rules such as 1.11, 1.12 and 1.18). The conflict can be waived only by the former client, Client X, giving informed consent confirmed in writing (RPC 1.9(a)); Client Y's consent is irrelevant. RPC 1.10(e) concerns conflict-checking systems, not screening.
Question 4: A client tells her attorney she plans to lie on the witness stand at her upcoming civil trial. The attorney advises against it, but the client insists. If the client testifies falsely, what is the attorney's primary obligation under NY RPC 3.3?
- Immediately disclose the false testimony to the judge
- Seek to withdraw if disclosure would not remedy the situation
- Take reasonable remedial measures, including disclosure to the tribunal if necessary (Correct answer)
- Maintain client confidentiality and take no action
Correct answer: Take reasonable remedial measures, including disclosure to the tribunal if necessary
NY RPC 3.3(a)(3) requires a lawyer who has offered material evidence, and comes to know it is false, to take reasonable remedial measures, including, if necessary, disclosure to the tribunal; RPC 3.3(b) imposes a similar duty where the lawyer knows a person intends to engage in fraudulent conduct related to the proceeding. The duty applies until the proceeding ends and overrides the confidentiality duty.
Question 5: A New York attorney receives a $5,000 retainer against future fees. She deposits it into her personal checking account and bills against it as she works. This handling of the retainer is:
- Proper because the attorney has earned the right to the funds upon receipt
- Proper if the client consents in a written fee agreement
- Improper because unearned client funds must be held in a separate attorney special (escrow or IOLA) account (Correct answer)
- Improper only if the amount exceeds $1,000
Correct answer: Improper because unearned client funds must be held in a separate attorney special (escrow or IOLA) account
Under NY RPC 1.15(a)-(b), funds belonging to another person that are incident to the practice of law, including an advance fee that has not yet been earned, must be deposited in a special attorney account, never commingled with the lawyer's own funds. Depositing the retainer in a personal account is commingling regardless of the amount.
Question 6: An attorney is approached by a prospective client for a consultation. No engagement letter is signed and no fee is paid. The prospective client discloses sensitive information. The attorney later realizes the representation would create a conflict and declines. Is the information protected?
- No, because no attorney-client relationship was formed
- Yes, the duty of confidentiality applies to information from prospective clients under NY RPC 1.18 (Correct answer)
- Yes, but only if the prospective client paid a consultation fee
- No, because the attorney expressly declined the representation
Correct answer: Yes, the duty of confidentiality applies to information from prospective clients under NY RPC 1.18
NY RPC 1.18 protects information disclosed by prospective clients even when no engagement is entered, and restricts the attorney's ability to use or reveal that information.
Question 7: A New York attorney settles a class action and receives a fee that is contingent on the outcome. Under the NY Rules, what is required regarding the fee?
- Court approval of the fee is sufficient; no separate client consent is needed
- The fee must be reasonable and approved by the court (Correct answer)
- The contingency must be disclosed only to the named plaintiffs
- Contingency fees in class actions are categorically prohibited
Correct answer: The fee must be reasonable and approved by the court
Attorneys' fees in a class action must be reasonable (RPC 1.5(a)), and under CPLR 909 the court awards fees from the recovery; the contingent arrangement itself must be in a writing under RPC 1.5(c). Court approval protects absent class members.
