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 and Attorney B are in the same firm. Attorney A previously represented Client X in a matter now adverse to Client Y, who wants to retain Attorney B. Attorney A is screened and receives no part of the fee. Under NY RPC 1.10, is Attorney B disqualified?
- Yes, because conflicts are always imputed within a firm
- No, because timely screening prevents imputation under NY RPC 1.10 (Correct answer)
- No, because only Attorney A is disqualified
- Yes, unless Client Y provides written consent
Correct answer: No, because timely screening prevents imputation under NY RPC 1.10
NY RPC 1.10(e) permits screening to prevent imputation of a personally disqualified lawyer's conflict when the screen is timely erected and meets the rule's requirements.
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(b) requires an attorney who knows a client has offered false evidence to take reasonable remedial measures, up to and including disclosure to the tribunal.
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 trust (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 trust (IOLA) account
Under NY RPC 1.15, unearned advance fees are client property and must be deposited in a properly maintained trust account (IOLA) until earned.
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
NY RPC 1.5(e) requires that attorney fees in class actions be reasonable, and court approval under CPLR Article 9 serves as the mechanism to ensure this.
NYLE Professional Responsibility 2
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?