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Client Transaction

In: Other Topics

Submitted By kdel
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Pages 4
Dave Deedan has recently gained majority ownership to Shoe Leonard’s when previous business owner passed away. Dave retains Andrew Haynus to draft a will for him. Before Haynus is finished drafting the will he thinks of a great way to help Shoe Leonard’s make even more money. Haynus decides he is going to present Dave with a deal and offer $50,000.00 and would like some say in the decision making process of the business. Haynus also remembers while he is there doing the work he needs a new pair of loafers, so he plans on buying a new pair of shoes also.
Haynus practices in a state that has adopted the Model Rule 1.8. How does this rule apply to the two business transactions Haynus wants to enter in with his client?
Entering into business transactions with a client may place the attorney and client in adversarial positions. The ethical rules are designed to ensure that the attorney representation will not be compromised by a profit motive.
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 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.
A lawyer's legal skill and training, together with...

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