Law and Ethics of Lawyering Sample Exam
These questions have not been thoroughly QAed. Questions on the final exam probably will be a little more precise/refined.
The time estimates also may be more accurate on the final. However, in all cases assume that you will have some time stress in the exam.
In any question where you believe that a client waiver or consent is necessary or desirable, you must also enumerate the specific details you would include in the waiver to get the requisite consent, such as the actual and reasonably foreseeable consequences to the client of granting the consent.
Where you are representing a client regarding “sales contracts,” you can assume that the contract is for the sale of tangible goods governed by the UCC.
Question #1 (30 minutes)
A lawyer computes his timesheets as follows: he takes the total number of hours he was in the office, determines the rough percentage of time spent on each client he worked on that day, and then allocates the total number of hours proportionately. For example, if he was in the office 10 hours and worked on 2 clients, one 40% of the day and the other 60% of the day, he would bill the first client 4 hours and the second 6 hours, even if he actually only worked 7 bona fide billable hours that day and the other 3 hours were administrative overhead hours. This way, he avoided having any unbillable time in the office. Is this technique permissible? Ethical?
Once you learn of your colleague’s practice, what must you do? What would you prefer to do? What consequences would you expect from any of those courses of action?
Question #2 (20 minutes)
You represent X in the sale of its business to Y. Your client contact, as well as many of the other employees you are dealing with in the representation, are also angling for jobs with Y post-closing. Therefore, you have some concerns that your client contact is not aggressively negotiating with Y for fear of undermining the potential of being hired by Y. What must you do? What would you prefer to do? What consequences would you expect from any of those courses of action?
Question #3 (20 minutes)
You represent X. X wants to list you as a credit reference. This means X will have other vendors who are deciding whether to extend X credit call you to ask about if X pays the bills on time and if X has solid financial footing. What issues does this raise? Can you bill for your time spent acting as a credit reference?
Question #4 (30 minutes)
During the Internet mania of the late 1990s, many public Internet companies were valued on the basis of revenues (i.e., the company’s value was 10X revenues). Knowing this, your client asks for your assistance with a sales contract where your client will be selling widgets to a customer, but in the same transaction the customer will sell other widgets to your client for an identical value. Thus, through this exchange of goods and cash, both companies will recognize equal amounts of revenues and expenses, but the stock price will improve because the company’s revenues will have increased. Virtually every other Internet company is doing the same practices. You are convinced there is no legitimate justification for the transaction other than to “manufacture” revenues. Assume that accountants frown on this practice but some accounting firms will ultimately accept the characterization as revenues and expenses. What must you do? What would you prefer to do? What consequences would you expect from any of those courses of action?
Eric’s Tips and Hints: This is very similar to the “roundtripping” story I emailed in class.
Question #5 (15 minutes)
For the past 2 years you have been spent 90% of your billable time on a single client’s affairs. The client is a public company. You have told your friends the name of this client. Your client is now planning to sell its business and you are working on the transaction. At a social event, a
friend asks you what projects you are working on at work. If you answer the question by saying “a merger,” “a sale” or “a strategic transaction,” your friend will likely be able to figure out that the client is selling its business and thus could trade on the stock. How do you answer your friend? What consequences might you expect?
A NOTE ABOUT MY GRADING PRACTICES
I score each question on a 100 point scale. I categorize an answer into one of several levels—marginally competent (50), competent (60) or very competent (70). Outstanding answers score higher than a 70; poor answers score less than 50. Within this broad framework, I make 5 point grade adjustments up or down when something catches my attention. For example, if an answer was generally strong but missed an essential point, I would normally deduct 5 points and score the answer a 65. Similarly, if the answer was generally competent but had good organization or picked up some subtle points, this answer scores a 65. Because I arbitrarily set 60 as my “default” score, my mean, median and mode for all questions are usually about 60.
I do not carry over good or bad feelings from one question to another. Thus, I score each question independently, multiply the score by the applicable percentage for that question, and add the adjusted scores together. There should be little benefit to “shifting” time from one question to enhance another question.
After I finish grading everyone’s scores, I use a histogram to set the relation between grades and scores.