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PPC2 Professional Responsibility study materials
PPC2 Professional Responsibility study resources

PPC2 Professional Responsibility practice questions

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Question 1Regulation of the Profession, Admission and Licensing

In the United States, which body has the primary authority to establish the requirements for admission to the practice of law?

  1. The state bar association of each state
  2. The American Bar Association's law school accreditation council
  3. The highest court of each state Correct answer.
  4. The legislature of each state

Explanation

Regulation of the legal profession is treated as a judicial function: each state's highest court sets admission requirements and supervises the bar, usually through a board of bar examiners or board of law examiners. Legislatures may enact related statutes and bar associations may offer recommendations, but the court's rules control.

Question 2Regulation of the Profession, Admission and Licensing

When a bar applicant's character and fitness is called into question, who bears the burden of demonstrating good moral character?

  1. The board of bar examiners, which must disprove fitness before denying admission
  2. The applicant's law school, which must certify the applicant's character and fitness
  3. The applicant, who must establish fitness under the standard the jurisdiction applies Correct answer.
  4. Disciplinary counsel, who must bring formal charges before the board may inquire

Explanation

An applicant for admission must prove that she satisfies every qualification, including good moral character and fitness. Law schools supply information and the board investigates, but the burden of establishing fitness and any rehabilitation rests on the applicant.

Question 3Regulation of the Profession, Admission and Licensing

Which description best matches the Multistate Professional Responsibility Examination (MPRE)?

  1. An oral examination conducted by a state bar's character and fitness committee
  2. A multiple-choice ethics examination that most jurisdictions require in addition to the bar exam Correct answer.
  3. A performance test in which applicants draft ethics opinions for a simulated client
  4. A section of the Uniform Bar Exam administered on the same day as the multiple-choice law test

Explanation

The MPRE is a separate, standardized multiple-choice test of professional responsibility rules and principles. Nearly every U.S. jurisdiction requires a qualifying score in addition to the bar examination and the character and fitness review, and the score can often be transferred between jurisdictions.

Question 4Regulation of the Profession, Admission and Licensing

Which of the following is an example of unauthorized practice of law by a person who holds no law license?

  1. A document preparer who selects will clauses for a fee and advises the client which clauses to use Correct answer.
  2. A paralegal summarizing a scheduling order for the supervising attorney
  3. An accountant preparing a tax return from figures supplied by the client
  4. A law student representing himself in a small claims action

Explanation

Unauthorized practice occurs when a nonlawyer gives legal advice tailored to a client's situation or performs services that require a law license. Choosing dispositive provisions and advising a client which to use is legal advice, even if a form is used.

Question 5Regulation of the Profession, Admission and Licensing

A lawyer admitted only in State A is lead counsel in a single trial in State B. Which mechanism typically allows her to appear in State B's court for that case?

  1. Pro hac vice admission, typically sought by motion with local counsel associated Correct answer.
  2. A temporary practice permit the clerk of court may issue for any matter
  3. Automatic nationwide admission arising from her license in State A
  4. Admission on motion, which any experienced out-of-state lawyer may demand for one case

Explanation

Pro hac vice admission lets a court admit an out-of-state lawyer for a particular proceeding, ordinarily on motion, with a locally admitted lawyer associated and a fee paid. It is discretionary with the court and does not create a general license to practice in the state.

Question 6Regulation of the Profession, Admission and Licensing

Admission on motion, without sitting for the bar examination, is generally available to an experienced lawyer who:

  1. Has practiced for at least one year in the jurisdiction where she was first admitted to the bar
  2. Has been admitted in any U.S. jurisdiction for at least sixty days
  3. Graduated from a law school approved by the admitting court's board of bar examiners
  4. Applies where the admitting jurisdiction offers reciprocity and she meets its experience and fitness standards Correct answer.

Explanation

Admission on motion rests on reciprocity: a jurisdiction waives its examination for lawyers from jurisdictions that extend the same courtesy, provided the applicant meets requirements such as years in practice, an accredited degree, and a clean disciplinary record. Neither short practice nor mere admission elsewhere suffices.

Question 7Regulation of the Profession, Admission and Licensing

Mandatory continuing legal education rules typically require lawyers to:

  1. Pass an annual open-book ethics quiz administered by the state bar
  2. Make a fixed number of court appearances each year
  3. Retake the bar examination every ten years
  4. Complete a specified number of credit hours each reporting period, including a minimum in ethics or professionalism Correct answer.

Explanation

Mandatory CLE rules require a set number of approved credit hours per reporting period and usually reserve a portion of those hours for ethics, professionalism, or bias-elimination topics. Failure to comply can lead to suspension until the deficiency is cured.

Question 8Regulation of the Profession, Admission and Licensing

A lawyer admitted only in State A works from a home office in State B, where she advertises, maintains a website aimed at State B residents, and regularly represents State B clients through local counsel. Under ABA Model Rule 5.5(a), her arrangement is:

  1. Impermissible, because this is a systematic and continuous State B practice without admission Correct answer.
  2. Permissible, provided she represents no more than ten State B clients in any twelve-month period
  3. Permissible, because she associates with local counsel in each State B matter
  4. Permissible, because her office is in her home and she employs no staff there

Explanation

Rule 5.5(a) bars a lawyer from practicing law in a jurisdiction in violation of that jurisdiction's regulation of the profession. A permanent local office, local advertising, and a steady stream of local clients amount to a systematic and continuous presence requiring admission; associating local counsel does not cure the violation.

Question 9Regulation of the Profession, Admission and Licensing

A lawyer admitted in State A is hired by a corporation headquartered in State B to provide legal services solely to that employer. Under ABA Model Rule 5.5 and typical state registration rules, she may:

  1. Open a private practice in State B on evenings and weekends while remaining employed by the corporation
  2. Represent the employer without registering or complying with State B's ethics rules, because there is only one client
  3. Provide legal services to the employer in State B after registering as in-house counsel where required Correct answer.
  4. Represent the employer in State B's courts without local admission or registration

Explanation

Model Rule 5.5(d)(1) allows a lawyer admitted in another U.S. jurisdiction to provide legal services to her employer, and most states implement this through a registered in-house counsel program with its own conditions. Registration typically carries the obligation to comply with the local ethics rules and CLE requirements.

Question 10Regulation of the Profession, Admission and Licensing

A lawyer admitted pro hac vice to try a case in another state's court:

  1. Is subject to the forum state's disciplinary authority and its rules Correct answer.
  2. May disregard the forum's ethics rules because the rules of her home jurisdiction govern all her conduct
  3. Is answerable for misconduct only to the disciplinary authority of the state where she is licensed
  4. Is immune from discipline in the forum state because she has not been admitted there

Explanation

A lawyer appearing in a proceeding is subject to the rules of the forum and to the disciplinary authority of the jurisdiction where the tribunal sits, in addition to the authority of her admitting jurisdiction. Model Rule 8.5 confirms that conduct connected with a proceeding is governed by the forum's rules.

Question 11Regulation of the Profession, Admission and Licensing

A lawyer who has been disbarred in a jurisdiction that permits reinstatement:

  1. May practice as an unlicensed consultant while the petition is pending
  2. Regains the license automatically once five years have passed
  3. Must petition for reinstatement and show rehabilitation and present fitness Correct answer.
  4. Need only pay outstanding dues and continuing education penalties

Explanation

Reinstatement after disbarment is not automatic; the lawyer must petition the admitting authority and carry the burden of proving rehabilitation, current fitness, and compliance with any conditions imposed. Payment of fees or the passage of time alone satisfies nothing.

Question 12Regulation of the Profession, Admission and Licensing

A lawyer facing pending disciplinary charges wants to resign from the bar. Which statement is most accurate?

  1. Resignation requires the written consent of the complaining client
  2. Resignation with charges pending requires approval and is usually treated as disbarment Correct answer.
  3. Resignation converts the pending matter into an automatic private reprimand
  4. A lawyer may resign at any time, and the resignation ends the pending investigation

Explanation

Under the model disciplinary enforcement rules, a lawyer may not resign while disciplinary proceedings are pending unless the court or board approves, and a resignation tendered under those circumstances is generally treated as a disbarment. This prevents a lawyer from escaping an adverse judgment by resigning.

Question 13Regulation of the Profession, Admission and Licensing

A lawyer admitted in States A and B is suspended for two years in State A for misappropriating client funds. What is the usual approach in State B?

  1. It will usually impose the same discipline after notice and an opportunity to be heard Correct answer.
  2. It may act only if the client also files a separate complaint with the second state's bar
  3. It automatically imposes permanent disbarment for any suspension imposed elsewhere
  4. It must dismiss the matter because the conduct occurred in another state

Explanation

Reciprocal discipline rules create a strong presumption that the second jurisdiction will impose the same discipline imposed elsewhere, after giving notice and a chance to be heard. The lawyer may resist only on limited grounds, such as a procedural defect in the foreign proceeding or a sanction clearly inappropriate under local rules.

Question 14Regulation of the Profession, Admission and Licensing

A lawyer who is administratively suspended for failing to pay bar dues:

  1. Is automatically reinstated when the dues payment reaches the bar's office
  2. Must stop practicing until reinstated, and practicing while suspended is a separate violation Correct answer.
  3. May continue practicing but may not file papers in any court
  4. May continue to practice so long as she notifies each client in writing of her administrative status

Explanation

Administrative suspension for nonpayment strips the lawyer of authority to practice law; client notification cannot cure it. Practicing while suspended is itself a disciplinary offense, and reinstatement usually requires an application and confirmation that all deficiencies are resolved.

Question 15Regulation of the Profession, Admission and Licensing

An applicant was convicted of misdemeanor shoplifting at nineteen, has had no other record, completed law school, and has an exemplary work history. In the character and fitness review, the board:

  1. Must admit the applicant, because one misdemeanor cannot bear on honesty
  2. Must treat the conviction as a permanent disqualification from admission in every jurisdiction
  3. May weigh the conduct's nature, recency, and evidence of rehabilitation Correct answer.
  4. May not consider conduct that did not result in a felony conviction

Explanation

Character and fitness review is an individualized assessment: the board considers the nature and seriousness of the conduct, its recency, the applicant's age at the time, and evidence of rehabilitation and candor. A single old misdemeanor does not dictate a result either way.

Question 16Regulation of the Profession, Admission and Licensing

An applicant realizes after filing her bar application that she omitted a college disciplinary sanction. Under prevailing admission rules, she should:

  1. Wait to see whether the board discovers the omission during its investigation
  2. Promptly correct the record, because the duty of candor continues after filing Correct answer.
  3. Say nothing, because the application was already filed under oath and cannot be amended
  4. Withdraw the application and reapply later in a different jurisdiction

Explanation

Applicants owe a continuing duty of candor to the admitting authority, and a false or incomplete application is a common ground for denial or for later discipline. Prompt self-reporting and correction usually mitigate the consequences.

Question 17Regulation of the Profession, Admission and Licensing

A lawyer admitted in State A represents a client in a three-day arbitration held in State B. The dispute arises from a contract negotiated and performed in State A, where the lawyer's practice is based. Under ABA Model Rule 5.5(c), the representation is:

  1. Permitted only if the client signs a written waiver of State B's unauthorized practice statute
  2. Permitted as reasonably related to her practice in the state where she is admitted Correct answer.
  3. Prohibited, because any physical presence in State B while representing a client is the practice of law there
  4. Permitted only if she obtains pro hac vice admission from the arbitrator

Explanation

Rule 5.5(c) allows a lawyer admitted elsewhere to provide legal services on a temporary basis when the services arise out of or are reasonably related to her practice in a jurisdiction where she is admitted. A short arbitration in another state over a contract centered in her home jurisdiction fits that category, and no pro hac vice motion to the arbitrator is required.

Question 18Regulation of the Profession, Admission and Licensing

A lawyer qualified in Country X wishes to practice in a U.S. state that licenses foreign legal consultants. As a foreign legal consultant, she may generally:

  1. Appear as counsel in the courts of the host state and in the federal courts sitting there
  2. Advise clients on Country X law but not on the law of the host state Correct answer.
  3. Handle any matter, provided she tells each client in writing about her foreign license
  4. Advise on host-state law whenever she works with a lawyer admitted there

Explanation

A foreign legal consultant is licensed to advise on the law of the foreign country where she is qualified, and sometimes on public international law, but not on host-state law. The license does not authorize appearances in the host state's courts or the practice of host-state law.

Question 19Regulation of the Profession, Admission and Licensing

An applicant is denied admission after the board finds her unfit, but she is never told the reasons and is given no hearing. Which is the strongest constitutional objection?

  1. The denial is a bill of attainder because it punishes her without a judicial trial
  2. The denial is an ex post facto law because the board applied standards adopted after she applied
  3. She was entitled to notice and an opportunity to be heard before denial Correct answer.
  4. The denial violates the Equal Protection Clause because admission standards vary among the states

Explanation

Although there is no constitutional right to a law license, a state that creates a licensing scheme must administer it with due process: an applicant facing denial on fitness grounds is entitled to notice of the reasons and a meaningful opportunity to respond. Courts review admission decisions for compliance with those procedural protections.

Question 20Regulation of the Profession, Admission and Licensing

Which statement about a state's power to require an experienced out-of-state lawyer to sit for its bar examination is most accurate?

  1. A state may not impose any requirement beyond proof of admission in another state
  2. The Privileges or Immunities Clause gives the lawyer a fundamental right to practice in every state
  3. A state may impose such requirements; there is no constitutional right to admission without them Correct answer.
  4. The Full Faith and Credit Clause obliges the state to recognize the lawyer's out-of-state license as a matter of comity

Explanation

Practice of law is not a fundamental right protected against state admission requirements, and states retain broad authority to set the conditions on which they will license lawyers, subject only to constitutional limits such as due process and equal protection. Admission elsewhere creates no entitlement to admission in a second state.

Question 21Regulation of the Profession, Admission and Licensing

A lawyer suspended for two years takes a job as a paralegal at a law firm. Which statement is accurate?

  1. She may appear at hearings as a consultant seated at counsel table and speak for the client
  2. She may keep her law office sign and letterhead so long as she adds the phrase of counsel to them
  3. She may do substantive work under supervision but may not give legal advice or appear as a lawyer Correct answer.
  4. She may continue to represent her former clients if a lawyer at the firm supervises the work and signs the filings

Explanation

A suspended lawyer may be employed in a law office in a nonlawyer capacity, performing substantive tasks under attorney supervision, but may not render legal advice, appear in court, or hold herself out as a lawyer. The firm must also ensure she does not mislead clients about her status.

Question 22Regulation of the Profession, Admission and Licensing

Which statement about the ABA's approval of law schools in the bar admission process is accurate?

  1. Most jurisdictions require graduation from an ABA-approved school, and accreditation is distinct from membership Correct answer.
  2. ABA approval is a matter of optional prestige that no admitting court takes into account
  3. The ABA accredits individual practitioners as qualified through its standing ethics committee
  4. The ABA admits lawyers to practice before the federal courts through its law school accreditation process

Explanation

Most U.S. jurisdictions require a J.D. from a law school approved by the ABA, and a few permit alternatives such as law office study. Accreditation of schools is a separate function from the ABA's voluntary membership and its model rules work.

Question 23Regulation of the Profession, Admission and Licensing

To practice in a federal district court, a lawyer:

  1. Must be admitted to that court's bar, typically by showing state admission and good standing Correct answer.
  2. Must pass a separate federal bar examination in each district where she practices
  3. Needs only a state license, because federal courts adopt state admissions automatically
  4. Must first be admitted to practice before the United States Supreme Court

Explanation

Each federal court maintains its own bar, and lawyers apply for admission by showing current state admission, good standing, and often a sponsor or certificate, and by paying a fee. Admission to one federal court does not automatically admit the lawyer to others.

Question 24Regulation of the Profession, Admission and Licensing

An applicant took the Uniform Bar Exam and received a score above the threshold set by the testing jurisdiction. She:

  1. May transfer the score to jurisdictions that accept it, subject to their thresholds and time limits Correct answer.
  2. May not transfer the score anywhere, because the examination is scored locally
  3. Is entitled to admission in every UBE jurisdiction without any further showing as to score
  4. Must retake the examination if she has been admitted elsewhere for more than one year

Explanation

A UBE score may be transferred to other jurisdictions that adopt the UBE, but each sets its own minimum score and the period during which a score remains usable. Transfer also requires satisfying the receiving jurisdiction's other admission requirements, such as character review.

Question 25Formation and Scope of the Lawyer-Client Relationship

A lawyer meets with a person for twenty minutes, gives advice about an upcoming deadline, and charges nothing. No engagement letter is signed. An attorney-client relationship

  1. arises only when the lawyer receives a deposit or retainer from the person.
  2. arises once the person reasonably relies on the lawyer's advice. Correct answer.
  3. arises only when the lawyer files a notice of appearance in a court proceeding.
  4. arises only after the lawyer and the person sign a written engagement agreement.

Explanation

An attorney-client relationship may be created by an express or implied agreement, and no writing, payment, or court appearance is required. The question is whether the person reasonably believes, based on the lawyer's conduct, that the lawyer is providing legal services. Giving specific legal advice during a consultation can create that relationship.

Question 26Formation and Scope of the Lawyer-Client Relationship

A lawyer agrees to handle a matter for a fee the lawyer reasonably expects will exceed $1,000, exclusive of costs. Under California law, the lawyer must

  1. reduce the agreement to writing only if the client requests a copy in writing.
  2. put the fee agreement in writing, signed by the client, ordinarily before work begins. Correct answer.
  3. obtain advance approval of the fee agreement from the State Bar before performing any work.
  4. use only an oral agreement, since fee arrangements need not be put in writing.

Explanation

Business and Professions Code section 6148 requires a written fee agreement signed by the client whenever the lawyer knows or reasonably should know that the total fee will exceed $1,000, exclusive of costs; California Rule 1.5 imposes a similar requirement. An agreement that violates the statute is voidable at the client's option.

Question 27Formation and Scope of the Lawyer-Client Relationship

A client pays a lawyer a $5,000 true retainer to secure the lawyer's availability during the coming year. Under California law, that payment

  1. must be refunded in full if the lawyer performs no work during the year.
  2. is earned on receipt and need not be refunded if the agreement so provides. Correct answer.
  3. must be deposited in the lawyer's client trust account and drawn down as work is performed.
  4. is unenforceable unless the lawyer performs at least some services during the year.

Explanation

A true retainer compensates the lawyer for availability rather than for services, so it is earned when received and is not client money held in trust. An advance fee is different: it belongs to the client until earned, and the unearned balance must be refunded. California enforces a nonrefundable retainer only if the agreement is clear and does not impair the client's right to discharge the lawyer.

Question 28Formation and Scope of the Lawyer-Client Relationship

A lawyer with no immigration experience is asked to handle a straightforward asylum application. The lawyer

  1. may accept if the lawyer can gain competence through reasonable preparation. Correct answer.
  2. may accept only if the client signs a written waiver of the duty of competence.
  3. must decline, because a lawyer may never act in an unfamiliar practice area.
  4. may accept and delegate the work to a nonlawyer with asylum experience.

Explanation

California Rule 1.1 requires competent representation, but a lawyer may accept a matter that is new if the lawyer can become competent through reasonable research and study, or by associating a competent lawyer. Competence is a nonwaivable duty and cannot be delegated to a nonlawyer.

Question 29Formation and Scope of the Lawyer-Client Relationship

An elderly client's memory is declining, but the client can still express clear preferences about how the matter should proceed. The lawyer should

  1. petition for a conservator in every case without exception.
  2. maintain a normal relationship and support the client's own decisions. Correct answer.
  3. withdraw, because a client with diminished capacity cannot direct a representation.
  4. defer all decisions to the client's closest living relative.

Explanation

California Rule 1.14 directs a lawyer to maintain as normal a client-lawyer relationship as possible and, so far as reasonably possible, to help the client participate in decisions. A conservator is sought only when the client cannot act in the client's own interest and less restrictive steps have failed.

Question 30Formation and Scope of the Lawyer-Client Relationship

A client wants help only with drafting a demand letter and plans to handle any later negotiation personally. The lawyer may

  1. limit the scope only in matters that will not involve a court filing.
  2. limit the scope if the client gives informed consent and the limitation is reasonable. Correct answer.
  3. not limit the scope of the representation, because a lawyer must handle the entire matter once retained.
  4. limit the scope only if the client also waives the duty of confidentiality.

Explanation

California Rule 1.2 permits a lawyer to limit the objectives or scope of a representation when the client gives informed consent and the limitation is reasonable under the circumstances. Limited-scope engagements are common and require no waiver of confidentiality or of any other professional duty.

Question 31Formation and Scope of the Lawyer-Client Relationship

In a civil case, the client wants to accept a settlement offer while the lawyer believes a better offer may still come. The decision whether to accept belongs to

  1. the court, which must approve any settlement of a pending case.
  2. the client, once the lawyer has explained the relevant considerations. Correct answer.
  3. the lawyer, as a matter of professional judgment about litigation risk.
  4. the lawyer and client jointly, with the lawyer's view controlling if they disagree.

Explanation

Rule 1.2(a) reserves certain decisions to the client, including whether to settle a civil matter, whether to plead guilty, whether to testify, and whether to waive a jury. The lawyer's role is to consult and explain the considerations; tactical and technical choices remain with the lawyer.

Question 32Formation and Scope of the Lawyer-Client Relationship

During a free consultation, a prospective client describes a sensitive dispute in detail. The lawyer declines the matter, and the person hires another firm. The lawyer

  1. may not use or reveal the information even though no representation began. Correct answer.
  2. may use the information freely, because no attorney-client relationship was formed.
  3. may use the information only if the lawyer charges no fee for the consultation.
  4. may disclose the information if the lawyer first sends the person a written disclaimer.

Explanation

California Rule 1.18 imposes a duty of confidentiality on information learned from a prospective client during a consultation about possible representation. The duty attaches before any engagement and bars both disclosure and adverse use of the information.

Question 33Formation and Scope of the Lawyer-Client Relationship

A lawyer who refers a client to another firm will do none of the work but wants a share of the fee. Under California rules, the arrangement is proper only if

  1. the total fee charged to the client is not increased because of the division.
  2. the two lawyers practice in the same law firm when the referral is made.
  3. the referring lawyer personally performs at least one-third of the substantive work on the matter.
  4. the client consents in writing and the lawyers assume joint responsibility. Correct answer.

Explanation

California Rule 1.5.1 allows lawyers who are not in the same firm to divide a fee only with the client's written consent and either a division proportionate to the services and responsibility each lawyer assumes or joint responsibility for the representation. The overall fee must still be reasonable.

Question 34Formation and Scope of the Lawyer-Client Relationship

A client stops paying invoices in a pending civil action, and the lawyer wants to withdraw. The lawyer may do so if

  1. the lawyer gives written notice to opposing counsel and files a motion within ten days.
  2. nonpayment alone is cause, and the lawyer need not seek court permission.
  3. the court consents and withdrawal causes no material prejudice to the client. Correct answer.
  4. the lawyer returns all fees previously collected and gives thirty days' notice to the client.

Explanation

California Rule 1.16 permits, but does not compel, withdrawal when a client fails to pay fees, provided the withdrawal can be accomplished without material adverse effect on the client's interests. In a pending proceeding the lawyer must also obtain the tribunal's permission and must take steps to protect the client's interests.

Question 35Formation and Scope of the Lawyer-Client Relationship

Midway through a matter, a lawyer learns that the client intends to present records the lawyer knows are forged. The lawyer

  1. must withdraw, because continued representation would assist the client's fraud. Correct answer.
  2. must report the client to the State Bar before moving to withdraw.
  3. may continue if the client promises in writing to withdraw the records at trial.
  4. may continue as long as the lawyer does not personally sign or authenticate the records.

Explanation

California Rule 1.16(a) requires a lawyer to withdraw when continued representation will result in a violation of the Rules of Professional Conduct or of law, and offering false evidence would do so. In a pending case the lawyer must seek the tribunal's permission and take steps to protect the client's interests without disclosing confidential information.

Question 36Formation and Scope of the Lawyer-Client Relationship

An associate learns significant information from a prospective client in a consultation, and the firm declines the matter. The firm is later asked to represent the opposing party in the same dispute. Under California rules, the firm

  1. may never accept, because the associate's knowledge is imputed to every lawyer in the firm without exception.
  2. may accept if the associate is screened and the prospective client is given written notice. Correct answer.
  3. may accept if the prospective client signs a waiver within thirty days of the consultation.
  4. may accept only if the associate leaves the firm before the representation begins.

Explanation

Under California Rule 1.18, a lawyer who receives disqualifying information from a prospective client may not represent a client with materially adverse interests in the same or a substantially related matter. The disqualification is imputed to the firm, but California allows the firm to avoid imputation by screening the lawyer and giving the prospective client written notice.

Question 37Formation and Scope of the Lawyer-Client Relationship

A corporation's vice president tells the company's lawyer to hide a regulatory violation from the board of directors. The lawyer should

  1. follow the vice president's instruction, because officers may speak for the corporation.
  2. resign immediately without telling anyone in the organization why.
  3. refer the matter to higher authority, up to the board if warranted. Correct answer.
  4. report the violation to the appropriate government agency at once.

Explanation

The client is the organization, not its officers, so a lawyer who learns that an officer is acting against the organization's interests must proceed as reasonably necessary for the organization's best interest. That ordinarily means referring the matter to higher authority within the entity, including the board of directors.

Question 38Formation and Scope of the Lawyer-Client Relationship

A client's employer agrees to pay the client's legal fees and asks the lawyer to send copies of all client communications. The lawyer may

  1. refuse any payment from a third party, because it creates a conflict of interest.
  2. send the copies, because the employer's payment makes the employer a co-client.
  3. accept the payment only if the employer signs a written conflict waiver.
  4. accept the payment but not share client information without informed consent. Correct answer.

Explanation

Rule 1.8(f) allows a lawyer to accept compensation from someone other than the client if the client gives informed consent, the payer does not interfere with the lawyer's independent professional judgment, and client information is protected. A payer does not become a client merely by paying the bill.

Question 39Formation and Scope of the Lawyer-Client Relationship

An insurer retains a lawyer to defend its insured and urges the lawyer to reject a settlement offer within policy limits. The lawyer

  1. must follow the insured's decision about whether to settle. Correct answer.
  2. must withdraw, because the insurer and the insured have conflicting interests.
  3. must follow the insurer's direction, because the insurer pays the legal fees.
  4. may decide whether to settle, since the lawyer owes duties to both insurer and insured.

Explanation

In a typical insurance defense the lawyer's client is the insured, and the insurer's payment of fees does not make the insurer the client. Whether to settle is a decision the client must make after consultation, so the insured's informed decision controls.

Question 40Formation and Scope of the Lawyer-Client Relationship

In California, a contingency fee is prohibited in

  1. landlord-tenant actions seeking less than $10,000 in damages.
  2. breach of contract actions between two businesses.
  3. personal injury actions arising from an automobile collision.
  4. criminal defense matters and family law matters involving support or property division. Correct answer.

Explanation

California Rule 1.5 forbids contingent fees in criminal cases and in family law matters where the fee is contingent on securing a divorce, on the amount of spousal or child support, or on the value of property divided. Contingent fees remain permissible in most civil matters.

Question 41Formation and Scope of the Lawyer-Client Relationship

A lawyer collects a $10,000 advance fee and withdraws after completing one-third of the work. The lawyer must

  1. hold the balance in the firm's operating account until the client makes a written demand.
  2. refund the entire amount, because advance fees cannot be earned until a matter concludes.
  3. refund the unearned portion promptly. Correct answer.
  4. keep the entire amount, because advance fees are earned when received.

Explanation

An advance fee belongs to the client until the lawyer earns it, and any unearned portion must be promptly refunded when the representation ends. A general advance cannot be converted into a nonrefundable payment by the lawyer's own characterization.

Question 42Formation and Scope of the Lawyer-Client Relationship

A law firm proposes to make its marketing consultant a partner and give him a share of the firm's profits. Under California rules, this arrangement is

  1. permissible if the consultant does no legal work and signs a confidentiality agreement.
  2. permissible if the firm discloses the arrangement in its client engagement letters.
  3. prohibited only if the consultant also refers clients to the firm for compensation.
  4. prohibited, because a nonlawyer may not be a partner or share in legal fees. Correct answer.

Explanation

California Rule 5.4 bars a lawyer or law firm from sharing legal fees with a nonlawyer and from forming a partnership with a nonlawyer if any of the partnership's activities consist of the practice of law. Disclosure to clients does not cure the prohibition.

Question 43Formation and Scope of the Lawyer-Client Relationship

Six months into a flat-fee matter, a lawyer decides to charge more than the agreed amount. The lawyer may charge the higher amount only

  1. with the client's informed consent to the change. Correct answer.
  2. after giving the client thirty days' written notice of the new rate.
  3. after the lawyer's costs of doing business have increased materially.
  4. once the work already completed under the original agreement has been billed in full.

Explanation

A fee agreement may be modified only with the client's informed consent; a unilateral mid-representation increase breaches the agreement and violates Rule 1.5. Notice of a rate change does not substitute for the client's consent.

Question 44Formation and Scope of the Lawyer-Client Relationship

A lawyer owns stock in a company that the client is suing. The lawyer

  1. may not represent the client if the interest materially limits the representation. Correct answer.
  2. may represent the client because a lawyer's personal financial interests never create a conflict.
  3. may represent the client if the lawyer discloses the investment orally.
  4. may represent the client if another lawyer in the firm reviews the lawyer's work.

Explanation

California Rule 1.7 prohibits representation when a lawyer's personal interest creates a significant risk that the representation will be materially limited. Disclosure alone does not remove a personal-interest conflict that impairs the lawyer's independent judgment.

Question 45Formation and Scope of the Lawyer-Client Relationship

A person who has never consulted a firm emails a detailed case file to every lawyer there, writing: "I send this so that you can never represent my opponent." California rules

  1. disqualify the firm unless each lawyer who received the email is timely screened.
  2. do not treat the sender as a prospective client or disqualify the firm. Correct answer.
  3. treat the sender as a prospective client and disqualify every lawyer in the firm.
  4. require the firm to return the file and obtain the sender's written consent.

Explanation

California Rule 1.18 protects a person who consults a lawyer about the possibility of forming a client-lawyer relationship. A person who unilaterally sends information for the purpose of disqualifying counsel has not consulted in that sense, so no prospective-client duty arises and the firm is not disqualified.

Question 46Formation and Scope of the Lawyer-Client Relationship

A lawyer represents a closely held corporation. A minority shareholder asks the lawyer to advise him in a personal dispute with the majority owner over corporate funds. The lawyer

  1. may represent the shareholder if the corporation pays the lawyer's fees for the matter.
  2. may not represent the shareholder in a matter adverse to the corporation. Correct answer.
  3. may represent the shareholder, because both parties own the same business.
  4. may represent the shareholder because the lawyer's duty runs to the individuals who own the corporation.

Explanation

When a lawyer is retained by an organization, the client is the organization itself, not its shareholders, officers, or employees. Representing a shareholder in a dispute adverse to the entity creates a concurrent conflict and risks misuse of the entity's confidences.

Question 47Formation and Scope of the Lawyer-Client Relationship

A corporate client with its own general counsel gives a law firm written, informed consent to represent parties adverse to the client in unrelated future matters. Such a waiver is

  1. generally enforceable, given informed consent and independent advice for the client. Correct answer.
  2. effective only if the adverse matter arises within one year of the waiver.
  3. never enforceable, because conflicts may not be waived in advance.
  4. effective only if a court approves the waiver before the lawyer accepts the adverse representation.

Explanation

California Rule 1.7 permits a client to consent to future conflicts, including materially adverse representations, and an advance waiver is generally enforceable when the client is sophisticated, independently advised, and understands the material risks. An open-ended waiver from an unsophisticated client usually fails for lack of informed consent.

Question 48Formation and Scope of the Lawyer-Client Relationship

After being discharged, a lawyer refuses to turn over the litigation file until the final bill is paid. Under California authority, the lawyer

  1. may retain the file as a possessory lien until all outstanding fees and costs are paid.
  2. may retain the lawyer's own notes and drafts but must return the client's own documents.
  3. must release the file, because a lawyer may not hold it to collect a fee. Correct answer.
  4. may retain the file if the client has paid no portion of the agreed fee.

Explanation

On termination a lawyer must promptly surrender all client materials, and California treats the entire file as belonging to the client; the lawyer may not withhold it as security for unpaid fees. The lawyer's remedy is a civil action for fees or, where applicable, a lien on the proceeds of the representation.

Question 49Formation and Scope of the Lawyer-Client Relationship

A client discharges a lawyer without cause and hires successor counsel. The discharged lawyer

  1. may collect the full contract price, because the discharge was without cause.
  2. may refuse to withdraw until the client pays the cancellation penalty in the retainer agreement.
  3. must continue in the matter until successor counsel files a substitution with the court.
  4. must withdraw and may recover the reasonable value of services rendered. Correct answer.

Explanation

A client may discharge a lawyer at any time, with or without cause, and the lawyer must promptly withdraw; a fee agreement may not penalize the client for exercising that right. The discharged lawyer is limited to the reasonable value of the work performed and must return any unearned fees.

Question 50Formation and Scope of the Lawyer-Client Relationship

A homeowner emails a lawyer: "I want you to handle my boundary dispute with my neighbor." The lawyer replies: "Send me the deed and the neighbor's letters; I'll review them and get back to you." No fee is discussed and nothing is signed. Has a lawyer-client relationship been formed with the homeowner?

  1. Yes, because the homeowner reasonably relied on the lawyer's undertaking. Correct answer.
  2. No, because the lawyer had not appeared in court on the homeowner's behalf.
  3. Yes, but only after a retainer is paid and deposited.
  4. No, because no written agreement and no fee were in place.

Explanation

A lawyer-client relationship arises when a person reasonably believes, based on the lawyer's words or conduct, that the lawyer is representing the person. No writing, fee payment, or court appearance is required. By telling the homeowner to send documents for review, the lawyer manifested willingness to provide legal services for that matter.