At the end of the episode, Harvey visits a bunch of
drug dealers who are keeping Mike's friend Trevor hostage. He tells them that
his firm's security cameras have them leaving his firm, and so he will use that
evidence against them, unless they agree to be his clients. He offers to sign
them as clients so he can't testify against them. Trevor owes them money and so
Harvey offers them $10,000, but he says that his retainer is $10,000 so he will
keep the money.
Let's unpack this situation one step at a time: First, Harvey says he
is Trevor's attorney, even though Harvey says that "Trevor doesn't know he
hired me." We need to determine whether an attorney-client relationship
has formed between Trevor and Harvey. The scope of the Model Rules, in Clause
[17] states that "Furthermore, for the purposes of determining the lawyer's
authority and responsibility, principles of substantive law external to these
Rules determine whether a client-lawyer relationship exists. Most of the duties
flowing from the client-lawyer relationship attach only after the client has
requested the lawyer to render legal services and the lawyer has agreed to do
so. But there are some duties, such as that of confidentiality under Rule 1.6,
that attach when the lawyer agrees to consider whether a client-lawyer
relationship has been established. See Rule 1.18. Whether a client-lawyer
relationship exists for any specific purpose can depend on the circumstances
and may be a question of fact." One side would argue that an attorney
client relationship had formed because the circumstances were dire (Trevor was
being held hostage), he didn't object when Harvey told the drug dealers he was
Trevor's lawyer, Harvey represented himself as Trevor's lawyer and acted like Trevor's lawyer, and when Trevor was let go, neither he nor Harvey said
anything about discontinuing the lawyer-client relationship. The other side
will argue that an attorney client relationship had not formed because Harvey had never met or spoken to Trevor before meeting him at the drug dealer's house, neither Trevor nor Harvey signed anything, Harvey was only going to help out a friend of Mike's and really wasn't interested in being Trevor's lawyer, Harvey only said he was Trevor's lawyer so the drug dealers would eventually let him go, and Harvey never spoke with or otherwise communicated with Trevor- Harvey didn't talk to Trevor before he was kidnapped, and he didn't talk with him after Trevor was released. I think, however, it would be plausible if not reasonable for Trevor to believe, after being released, that Harvey was still his lawyer, and so I think an attorney-client relationship has formed here (feel free to agree or disagree with me in the comments).
Violation of 4.3 and 1.7(a)(2)
This matters because if Trevor is Harvey's client, then he is first violating 4.3 by meeting with the drug dealers because they are unrepresented persons, and then he is violating Rule 1.7 because signing the drug dealers to be his clients should cause a conflict of interest between the interests of Trevor and his hostage takers, who are now all of Harvey's clients. 4.3 says in part that "the lawyer shall not give legal advice to an unrepresented person, other than the advice to secure counsel, if the lawyer knows or reasonably should know that the interests of such a person are or have a reasonable possibility of being in conflict with the interests of the client." Here, Harvey is telling them to secure counsel but HE wants to be their counsel so he is, in effect, giving them legal advice, and he should know that their interests in kidnapping his client are directly in conflict with the interest of his client, who has been kidnapped by them. Harvey has a concurrent conflict of interest between two current clients when he signs the drug dealers to be his clients when Trevor is already his client. If Trevor decides to sue them, then "the interests of one client will be directly adverse to another client" which prohibits Harvey from representing both of them. More importantly, this likelihood of potential conflict between their two interests violates 1.7(a)(2) where a conflict occurs when "there is a significant risk that the representation of one or more clients will be materially limited by the lawyer's responsibilities to another client..." Now if not directly adverse, Harvey could represent both parties, but he would need, among other things, both of their informed consents, signed in writing. Neither gave informed consent, signed in writing. There was nothing to suggest that Harvey's engagement letter had anything in it discussing the conflict of interests, and Trevor didn't sign anything.
Violation of 7.3(b)(2); Two Possible Violations of 8.4(b), Possible Violation of 1.16(a)(1)
Next, Harvey coerces them into signing the engagement letter, threatening them with prosecution if they don't sign. First, this violates 7.3(b)(2). Even though he isn't signing them for "pecuniary gain", 7.3(b)(2) states that a lawyer shall not solicit professional employment in-person if "the solicitation involves coercion, duress, or harassment." Here, by blackmailing them into signing the engagement letter, Harvey has solicited professional employment by coercion, in violation of this rule. Additionally, the blackmail here might be a crime, and so Harvey may be violating 8.4(b) by committing "a criminal act that reflects adversely on the lawyer's honesty, trustworthiness, or fitness as a lawyer in other respects." Additionally, by signing them so he doesn't have to testify agains them, Harvey may be obstructing justice, which would be another violation of 8.4(b) (this one was really tricky, so I would appreciate your comments below- namely, whether signing a client so you don't have to testify against them violates the rules of professional conduct). Consequently, the representation itself "will result in a violation of the rules of professional conduct or other law" and so because Harvey did not refuse the representation and did not withdraw from the representation, he is also violating 1.16(a)(1).
Finally, let's talk about fees. An attorney definitely has the right to set his or her fees, so long as the fees are reasonable and comply with the ethical rules. Therefore, the question is whether a $10,000 retainer is "reasonable" (Rule 1.5(a)). Under the Model Rules the retainer is probably "reasonable," because under the model rules a retainer is merely an advanced payment that is given back to the client when the termination ends. So even though Harvey smugly puts the check back into his pocket, under the Model Rules, that money now belongs to the drug dealers, and Harvey is only holding it in trust for them until they use a part of it for his services. If they fire him, Harvey has to refund the retainer not used for his services under Rule 1.16(d). However, under many jurisdictions (but not the model rules), the idea of a "true retainer" exists, where the attorney earns the money as soon as the retainer is given to him- he is given the money simply for being available. If New York allows attorneys to have true retainers, then Harvey earned that money simply for being available to them, and so the money is now his. If the money is a true retainer, Harvey could be violating Rule 1.5 because the true retainer could possibly not be a reasonable fee. Then again, to have a Harvard-educated attorney at the best white-shoe law firm in New York available to you may make the fee reasonable.
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