06. Negotiation and Transactional Matters
P.403-424
Lawyers as negotiators Rules 1.2(d), 4.1, 8.4(a)(c)
 In negotiation, no judge, no party under oath,
 Party has no duty to share what it learns, lawyer with greater knowledge/ better informed than opposing lawyer can exploit it to her client's advantage.
 But negotiations also has limits


Rule 8.4(c)
o It is professional misconduct for a lawyer to... engage in conduct involving dishonesty, fraud, deceit or misrepresentation…



Rule 4.1 [The NY rule has only part (a)]
o In the course of representing a client a lawyer shall not knowingly:
 (a) make a false statement of material fact or law to a third person; or
 [Third person can include opposing lawyer or client]
 (b) fail to disclose a material fact to a third person when disclosure is necessary to avoid assisting a criminal or fraudulent act by a client, unless disclosure is prohibited by Rule 1.6.
 [If non-disclosure constitute assisting crime/ fraud by client  lawyer must disclose.
But need not disclosure if 1.6 prohibit such disclosure]
Rule 4.1 comment [3]
o Paragraph (b) states a specific application of the principle set forth in Rule 1.2(d) and addresses the situation where a client's crime or fraud takes the form of a lie or misrepresentation

Ordinarily, a lawyer can avoid assisting a client's crime or fraud by withdrawing from the representation.
o Sometimes it may be necessary for the lawyer to give notice of the fact of withdrawal and to disaffirm an opinion, document, affirmation or the like.
o In extreme cases, substantive law may require a lawyer to disclose information relating to the representation to avoid being deemed to have assisted the client's crime or fraud.
o If the lawyer can avoid assisting a client's crime or fraud only by disclosing this information, then under paragraph (b) the lawyer is required to do so, unless the disclosure is prohibited by Rule 1.6.



•

Policy: if the only way to keep from assisting crime of fraud of client is to disclose  lawyer can use permitted

1.6 exceptions to confidentiality to disclose (or lawyer's silence may have assisted it)



NY Rule 1.6(b)(3)
o A lawyer may reveal or use confidential information to the extent that the lawyer reasonably believes necessary:…
 to withdraw a written or oral opinion or representation previously given by the lawyer
 and reasonably believed by the lawyer still to be relied upon by a third person,
 where the lawyer has discovered that the opinion or representation was based on materially inaccurate information or
 is being used to further a crime or fraud…

Negotiation issues for lawyers mainly arise in one of three ways:
1) Bad client problem P.409

• Lawyer learned that client is a fraudster and unwittingly have been assisting her fraud, or maybe she unintentionally made a material false statement and won't now correct it

• Whether lawyer's quiet withdrawal without warning violate the professional conduct rules

• Loyalty and confidentiality vs. interest in avoiding/ minimizing harm to innocent victims of a client's illegal conduct or to courts and other tribunals

• KYC in law firms - since lawyers are to trust their clients, should know their client

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