Conflicts of Interest

Question 1

What is the potential ramification of a conflict of interest?

Answer 1

1. Disqualification from representation
2. Disciplinary sanctions

Question 2

When will a conflict arise?

Answer 2

• Direct adversity: representing a plaintiff and the defendant.
  
  • Not waivable
• Material limitation on the lawyers’ representation
  
  • Can come from current or former clients or third parties or lawyer’s own interest

Question 3

When can a conflict be waived?

Answer 3

1. When it is waivable,
2. the client gives informed consent, which can be oral,
3. the lawyer has a reasonable belief that representation will not be adversely affected
4. all affected clients waive the conflict

Question 4

When will an attorney be precluded from representing somebody because of a former client?

Answer 4

If it is a substantially related matter:

1. What was the scope of the prior representation?
2. Could the lawyer have learned information in connection with that representation?
   
   1. If yes, the matters are related
3. Would that information be useful in this litigation.

If all of the above are answered affirmatively, then there is an irrebutable presumption that there is a conflict.

Question 5

What kind of personal interest of the lawyer will create a conflict?

Answer 5

1. Business dealings or acquisitions of an interest in client or client’s property
2. Preparing a will/gift that the attorney is interested in
3. No acquisition of story rights until representation ends
4. Proprietary interests in clients
   
   1. No loans to clients
   2. No advances except for court costs or for indigent clients
5. No sex with clients, unless preexisting
   
   1. If this happens, that will only personally DQ the attorney, not the whole firm.

Question 6

What if a third party gets involved?

Answer 6

The client is still the client! The payor is NOT the client.

• Client must be informed of the third-party payment and consent to it!

Question 7

Can an attorney limit malpractice recovery?

Answer 7

Nope, not through an agreement with the client.

Question 8

What is imputed disqualification?

Answer 8

If one lawyer in a firm is conflicted out of representation, then the whole firm is conflicted out unless

1. the client consents
2. the conflict is based on the lawyer’s personal interest and is not materially limiting

Question 9

What is screening?

Answer 9

A way of preventing an incoming attorney from conflicting the whole firm out.

1. Lawyer is immediately “screened” on the matter
   
   1. Lawyer cannot communicate any information learned about prior representation to anyone in the firm AND
   2. lawyer is barred from participation in any fees associated with that representation
2. Affected client must be notified and allowed to monitor the screening
3. Applies to non-professionals as well
4. Former client has no grounds to object as long as the screening is valid!

Question 10

Who does an attorney represent if they represent an organization?

Answer 10

The organization and its “control group” (principal managers/decisionmakers), but not individuals!

Question 11

What should an attorney do if they learn some dirt about the organization?

Answer 11

If they

• know
• of a violation of law
• that may be imputed to the organization and
• is likely to result in substantial injury (which can be financial),

then the attorney should take measures including referring to higher organizational authority.

Lawyer may quit if the organization does nothing. May communicate with management the reasons for quitting.

Question 12

How do potential clients affect conflicts of interest?

Answer 12

The same rules about screening will apply. The individual lawyer who consulted with the putative client is disqualified, but can be screened.