Summary: 10) Ls For Corporations And Other Organizations

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• 1 10) Ls for Corporations and Other Organizations

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• General Rule on who is the "client" in Entity Rep?

  1.13(a).
  
  When representing an entity-C (corporation, partnership) or an unincorporated association (union, trade association), the L represents only the entity itself, acting through its duly authorized constituents. 

• Issue Spot: Entity Cs

  Corporations, closely-held corps, partnerships, limited partnerships, trade associations, unions, government agencies

• Why a clear identification of C is vital in entity rep context

  1. Conflicts of Interest. Concurrent conflicts rule prohibits L from simultaneously representing two clients where the rep of C1 has a material adverse effect on his rep of c2. Successive Conflict Rs prohibit L from representing a new C whose interests are materially adverse to a former C in the same or a substantially related matter)
  
  
  2. Privilege (ACP) and Confidentiality (PDC). The ACP and PDC are specific to a given C, so L may need to know C's identity to determine who is empowered to assert/waive an evidentiary privilege.

• 2 Theoretical approaches regarding entity representation

  1) Group Theory (Limited application; closely held corps and partnerships only).
  
  2) Entity Theory. (Majority theory, ABA 1.13(a) adopts).

• 2) Entity Theory (Majority Theory)

  Defined - 1.13(a). AN L for an entity represents the entity itself, not individual officers or agents. 
  
  Application: A L representing an entity must be aware of the substantive law establishing the structure of the entity.
  
   Ls often represent runtimes in which structures of authority are set out by applicable substantive law (i.e., the law of corporations governs the relationship between a corporation and its SHs, officers, directors, and other employees. 

• Where has Entity Theory been applied to closely-held corporations, general and limited partnerships, joint ventures, etc,

  Many cases apply entity theory to closely-held corporations, limited partnerships, etc. These cases generally turn on the entity having some kind of formal structure, such that the L representing the organization can identify the persons with power to act on the organization's behalf.

• Beyond Theory: Rule of Thumb for whether the organizational client should be treated as [a] an entity or [b] an aggregation of individuals

  The more formal the association, the longer its duration, and the more elaborately defined its purposes, the more likely it is that the group will be regarded as an entity that is distinct from its individual constituents.

• Where L must deal with various constituents who have different views about what is the entity's "best interests

  Where different constituents have conflicting views, 1.13(a) provides that a L retained by the entity-C represents the entity acting through its duly authorized constituents. Here, L should refer to corporate law to determine which constituents are duly authorized to act on the organization's behalf. 
  
  
  Where the many agents are on the same page regarding the corp's "best interests," L may follow their instructions and be assured that he is acting the organization's best interests. 

• ABA R: Essential Principle for Entity Representation.

  1.13(a). The L must act on behalf of the organization, not its constituents.

• In Brief - 1.13(b). Mandatory Reporting Up.

  A L who knows that an organizational employee is engaged in wrongdoing that would be harmful to the organization must take remedial action that is in the best interests of the organization, including--unless not necessary in organization's best interests--referring the matter to a higher authority in the organization.