500 MPRE Practice Questions & Answers A+ Solution Guide: Summer 2022/2023
1. Conglomerate Corporation owns a little more than half the stock of Giant Company. Conglomerate's stock, in turn, is public, available on the public stock exchange, as is the remainder of the stock in Giant Company. The pr...
500 MPRE Practice Questions & Answers
A+ Solution Guide: Summer 2022/2023
1. Conglomerate Corporation owns a little more than half the stock of Giant Company.
Conglomerate's stock, in turn, is public, available on the public stock exchange, as is
the remainder of the stock in Giant Company. The president of Conglomerate
Corporation has asked Attorney Stevenson to represent Giant Company in a deal by
which Giant would make a proposed transfer of certain real property to Conglomerate
Corporation. The property in question is unusual because it contains an underground
particle collider used for scientific research, but also valuable farmland on the surface,
as well as some valuable mineral rights in another part of the parcel. These factors
make the property value difficult to assess by reference to the general real-estate
market, which means it is difficult for anyone to determine the fairness of the transfer
price in the proposed deal. Would it be proper for Attorney Stevenson to facilitate this
property transfer at the behest of the president of Conglomerate, if Attorney Stevenson
would be representing Giant as the client in this specific matter?
a) Yes, because Conglomerate Corporation owns more than half of Giant Company, so
the two corporate entities are one client for purposes of the rules regarding conflicts of
interest.
b) Yes, because the virtual impossibility of obtaining an appraisal of the fair market
value of the property means that the lawyer does not have actual knowledge that the
deal is unfair to either party.
c) No, because the attorney would be unable to inform either client fully about whether
the proposed transfer price would be in their best interest.
d) No, not unless the attorney first obtains effective informed consent of the
management of Giant Company, as well as that of Conglomerate, because the
ownership of Conglomerate and Giant is not identical, and their interests materially
differ in the proposed transaction. - Answer d) No, not unless the attorney first obtains
effective informed consent of the management of Giant Company, as well as that of
Conglomerate, because the ownership of Conglomerate and Giant is not identical, and
their interests materially differ in the proposed transaction.
RESTATEMENT § 131
2. Mr. Burns, the chief executive officer of Conglomerate Corporation, now faces
criminal charges of discussing prices with the president of a competing firm. If found
guilty, both Mr. Burns and Conglomerate Corporation will be subject to civil and criminal
penalties under state and federal antitrust laws. An attorney has been representing
Conglomerate Corporation. She has conducted a thorough investigation of the matter,
,and she has personally concluded that no such pricing discussions occurred. Both
Conglomerate Corporation and Mr. Burns plan to defend on that ground. Mr. Burns has
asked the attorney to represent him, as well as Conglomerate Corporation, in the
proceedings. The legal and factual defenses of Conglomerate Corporation and Mr.
Burns seem completely consistent at the outset of the matter. Would the attorney need
to obtain informed consent to a conflict of interest from both Mr. Burns and a separate
corporate officer at Conglomerate Corporation before proceeding with this dual
representation?
a) Yes, the likelihood of conflicting positions
in such matters as plea bargaining requires the attorney to obtain the informed consent
of both clients before proceeding with the representation.
b) Yes, because it will always be in the best interest of a corporation to blame the
individual who acted in the situation, to avoid liability under a theory of respondeat
superior.
c) No, because their legal and factual assertions appear identical in this case, so the
risk of contradiction or adverse positions in the litigation is de minimis.
d) No, because no one else at Conglomerate Corporation would be able to provide
effective consent to the potential conflict of interest on behalf of the organization, if the
chief executive officer has required the dual representation to occur. - Answer a) Yes,
the likelihood of conflicting positions
in such matters as plea bargaining requires the attorney to obtain the informed consent
of both clients before proceeding with the representation.
RESTATEMENT § 131
3. An attorney decides to purchase "litigation cost protection" insurance for matters she
handles on a contingency fee basis. Plaintiffs' lawyers can buy this type of insurance on
a case-by-case basis, for a one-time premium payment. The insurance is available for
purchase up to three months after the filing of the initial complaint. Note that this policy
is separate and distinct from malpractice liability insurance. The purpose of this type of
insurance is to reimburse the attorney for litigation costs advanced by the attorney - only
in the event of a trial loss. Do the Model Rules of Professional Conduct prohibit the
attorney from purchasing litigation cost protection insurance for her contingency fee
cases?
a) Yes, because the client and the attorney may have different cost-benefit calculations.
b) Yes, for an attorney may prefer that his
client accept a low settlement offer to ensure that the attorney receives his fee, while
the client wants to reject a settlement offer and take his chances at trial.
,c) No, insurance coverage is categorically outside the scope of the Model Rules.
d) No, the attorney may purchase litigation cost protection insurance so long as she
does not allow the terms of the coverage to adversely affect her independent
professional judgment, the client-lawyer relationship, or the client's continuing best
interests. - Answer d) No, the attorney may purchase litigation cost protection
insurance so long as she does not allow the terms of the coverage to adversely affect
her independent professional judgment, the client-lawyer relationship, or the client's
continuing best interests.
N.C Formal Ethics Op. 2018-6
4. An attorney purchased "litigation cost protection" insurance at the outset of
representing a plaintiff in a personal injury case. When the attorney recovered funds for
the client through a settlement or favorable trial verdict, the attorney proposed to receive
reimbursement for the insurance premium from the judgment or settlement funds. The
attorney disclosed the cost of the insurance to the client as part of the representation
agreement. Was it proper for the attorney to include in a client's fee agreement a
provision allowing the attorney's purchase of litigation cost protection insurance and
requiring reimbursement of the insurance premium from the client's funds in the event of
a settlement or favorable trial verdict?
a) Yes, because the Model Rules do not purport to regulate insurance for lawyers,
which is a matter of state statute.
b) Yes, if the amount charged to the client is fair and reasonable, and the lawyer fully
explains to the client what litigation cost protection insurance is, why the lawyer believes
a litigation cost protection policy will serve the client's best interests, that the client
should get the advice of independent legal counsel regarding the arrangement, that
other lawyers may advance the client's costs without charging the client the cost of a
litigation cost protection policy; and the client gives informed consent in writing, while
the lawyer maintains independent professional judgment.
c) No, because the client and the lawyer have different cost-benefit calculations in this
scenario.
d) No, lawyer may not include in a client's fee agreement a provision allowing the
lawyer's purchase of litigation cost protection insurance and requiring reimbursement of
the insurance premium from the client's funds in the event of a settlement or favorable
trial verdict. - Answer b) Yes, if the amount charged to the client is fair and reasonable,
and the lawyer fully explains to the client what litigation cost protection insurance is, why
the lawyer believes a litigation cost protection policy will serve the client's best interests,
that the client should get the advice of independent legal counsel regarding the
arrangement, that other lawyers may advance the client's costs without charging the
, client the cost of a litigation cost protection policy; and the client gives informed consent
in writing, while the lawyer maintains independent professional judgment.
N.C Formal Ethics Op. 2018-6
5. Mr. Burns, the chief executive officer of Conglomerate Corporation, now faces
criminal charges of discussing prices with the president of a competing firm. If found
guilty, both Mr. Burns and Conglomerate Corporation will be subject to civil and criminal
penalties under state and federal antitrust laws. An attorney has been representing
Conglomerate Corporation. She has conducted a thorough investigation of the matter,
and she has personally concluded that such pricing discussions did in fact occur. Both
Mr. Burns and Conglomerate Corporation have stopped their denials, and they now
concede that the pricing discussions took place. One of Mr. Burns' defenses will be that
the former general counsel of Conglomerate Corporation had advised Mr. Burns that a
discussion of general pricing practices with a competitor would not be illegal. In
contrast, Conglomerate Corporation denies that this was the legal advice given, and
instead asserts that Mr. Burns acted without authority. Given these facts, would it be
proper for the attorney to proceed with the dual representation, if both Mr. Burns and a
separate corporate officer at Conglomerate provide written consent to any potential
conflict of interest between them?
a) Yes, because their legal and factual assertions appear identical in this case, so the
risk of contradiction or adverse positions in the litigation is de minimis.
b) Yes, although the likelihood of conflicting positions in such matters as plea bargaining
requires the attorney to obtain the informed consent of both clients before proceeding
with the representation, dual representation is permissible if each party consents.
c) No, because it will always be in the best interest of a corporation to blame the
individual who acted in the situation, to avoid liability under a theory of respondeat
superior.
d) No, the conflicting positions between Conglomerate and Mr. Burns are so great that
the same lawyer cannot provide adequate legal representation to both, so consent to
the conflict is ineffective. - Answer d) No, the conflicting positions between
Conglomerate and Mr. Burns are so great that the same lawyer cannot provide
adequate legal representation to both, so consent to the conflict is ineffective.
N.C Formal Ethics Op. 2018-6
6. Big Firm represents hundreds of corporate clients out of a dozen offices in different
states. The firm has no formal procedures in place to check for conflicts at the outset of
representation for new clients, but the managing partner of the firm has an incredible
memory and has never failed to spot a potential conflict of interest in the past. An
attorney agrees to represent a new corporate client that owns many subsidiaries, and
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