Avoiding Conflicts of Interest: some tips to shake them off

The Ames & Gough LPLI 2024 Claims Survey has reported that conflict of interest claims have been the main driver of claims for the past several years. According to the ABA Model Rules of Professional Conduct, Rule 1.7, "a lawyer shall not represent a client if the representation involves a concurrent conflict of interest."  While avoiding conflicts sounds simple, many lawyers are frequently in situations that could lead to issues.   

For example, an estate planning client might bring their non-client spouse to a meeting. Or an attorney representing a corporation might be asked legal questions by an employee of the corporation. A plaintiff's attorney might have clients that were involved in the same accident.  Those seemingly routine interactions could quickly lead to a claim involving conflict of interest. 

When determining whether you have a conflict, or might have one, keep the following in mind:

• Remember your duties of loyalty and confidentiality to your client 
  Loyalty to a current client prohibits undertaking representation directly adverse to that client without their informed consent. Thus, absent consent, a lawyer may not act as an advocate in one matter against a person the lawyer represents in some other matter, even when the matters are wholly unrelated. ABA Model Rule Prof. Conduct 1.7, Comment 6. 
• Implement firm policies and procedures to check for conflicts 
  How do you keep track of conflicts? Memory only isn't the best way. Use a computerized software system designed for law firms in addition to your memory and a client index. 
  Update your database continually and concurrently when new clients are retained. 
• Train your firm's attorneys and staff on a regular basis on the rules of ethics in your jurisdiction and on how to spot a conflict. 
• Inform your client verbally and in writing in the event a conflict arises. You should document the nature of the conflict, the date it was discovered, to whom it was disclosed, how it might impact your client's case and any actions taken to address the conflict.   
  Per Rule 1.7, a concurrent conflict of interest exists if: 
  (1) the representation of one client will be directly adverse to another client; or 
  (2) 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, a former client or a third person or by a personal interest of the lawyer. 
• If there is a conflict, are you able to provide competent and diligent representation to each affected client? Is a claim being asserted by one client against another? 
• In the event that the conflict may be waived, ensure that you:
  - Confirm your local rules regarding conflict waivers. 
  - Obtain your client's informed consent in writing if a conflict waiver is desired. 
  - Consider whether your client is competent to provide informed written consent. 
  - Advise your client that they have the right to consult with independent counsel on the issue.  
  - Obtain a written conflict waiver that all of your affected clients sign.  
• Devise a plan for withdrawal if the conflict is not waived, if it cannot be waiver and/or if it is prohibited by law. Failure to do so could lead to disqualification, and a possible claim against you. 
• Confirm that a prospective lateral hire does not have any conflicts with clients your firm is currently representing. 
• Similarly, perform a check on all clients a lateral desires to bring to your firm before your firm renders any services. 

Keep in mind that conflicts may also involve former clients. You should not represent another person in the same or substantially related matter that involved a former client if the clients' interests are materially adverse.  In this instance, a written conflict waiver would be required to proceed. Similarly, a written conflict waiver is also required if you have acquired confidential information from the former client. 

Finally, a cause of action in a legal malpractice claim could also assert that an attorney placed their interests above a client, or obtained an advantage that they were not otherwise entitled to. Again, keep your duties of loyalty in mind when representing a client. 

In sum, be wary of potential conflicts of interest, both before, during and after your representation of a client. Implementing proper controls to avoid conflicts is essential. If a conflict arises, notify your client immediately and then follow up in writing. If a conflict waiver is appropriate, ensure that you obtain a written conflict waiver from all involved parties. In the event that a conflict is unwaivable, take steps to withdraw as soon as possible. This will protect not only your client, but also help to insulate you and your firm from a claim. 

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