[textbook]Traversing the Ethical Minefield Problems, Law, and Professional Responsibility by Susan R. Martyn (z-lib.org)(1) (1)

illicit activity for the exception to apply. It is therefore irrelevant . . . that [the lawyers] may
have been in the dark.” . . .
CONCLUSION
The prosecution should have followed the two-step submission procedure in Zolin, and
did not. But that error was harmless, because the judge disregarded the incorrectly
submitted attorney-client communications. The attorneys’ lack of any guilty knowledge did
not matter, because the privilege was the client’s, and the client’s misconduct sufficed to
lose it, despite the lawyers’ innocence of wrongdoing. The properly submitted materials
established reasonable cause to believe that the Chens and Sunrider were using their lawyers
as part of an ongoing scheme to evade taxes, so the district judge was within his discretion
in allowing the government to compel disclosures under the crime-fraud exception.
Problems
7-9. Martyn admonished Client about the importance of fully disclosing all assets on a
bankruptcy filing. Client failed to do so and was indicted for bankruptcy fraud. Can
Martyn be forced to testify about the original warning?
7-10. Client fired Martyn & Fox after Martyn accused Client of fraudulent conduct in
connection with certain lease transactions in which Martyn & Fox could not confirm the
existence of the underlying equipment. Lawyer A, successor counsel, calls Fox to find out
why such a fine firm was terminated. “Were there any disagreements?” Lawyer A asks.
What if Martyn is called to testify about the lease transactions in subsequent litigation?
Lawyers’ Roles:
The Instrumental Lawyer and the Bounds of the Law
Viewed from a public perspective, the role of lawyers in cases facilitating massive client
fraud cannot be ignored. Lawyers and law firms that have become ensnared in client
misbehavior in past decades appear to have misconstrued their role in these representations.
Indeed, two years before Judge Bilby’s decision in ACC, Judge Stanley Sporkin upheld the
federal receivership of Lincoln Savings & Loan, concluding his opinion with these
observations:
There are other unanswered questions presented by this case. Keating (the client’s CEO) testified that he was so
bent on doing the “right thing” that he surrounded himself with literally scores of accountants and lawyers to
make sure all the transactions were legal. The questions that must be asked are:
Where were these professionals, a number of whom are now asserting their rights under the Fifth Amendment,
when these clearly improper transactions were being consummated?
Why didn’t any of them speak up or disassociate themselves from the transactions? Where also were the outside
accountants and attorneys when these transactions were effectuated? 1
ACC and Statros illustrate what can happen when lawyers overidentify with clients and
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