MRPC 1.7 CURRENT CONFLICTS

Question 1

True or false: Rules 1.7, 1.8, and 1.9 are comprehensive in terms of a lawyer’s duty to remain conflict-free

Answer 1

False. Full duty to remain conflict free is not covered in entirety in these three rules

Question 2

What does Rule 1.7(a) say and is it mandatory?

Answer 2

Rule 1.7: Current Clients
(a) Except as provided in (b), a lawyer SHALL NOT (mandatory) represent a client if the representation involves a concurrent conflict of interest IF
The representation of one client will be directly adverse to another client.

1) ONLY applies to direct client-to-client conflicts
Ex: You can’t represent Client A and B if you’re already representing Client A and Client B is suing Client A → directly adverse
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 → applies to direct and indirect conflicts):
+ Must be a significant risk AND
+ Must be a material limitation

Question 3

What does Rule 1.7(b) say? What’s the first question a lawyer should ask themselves before going straight for 1.7(b)?

Answer 3

Can the conflict be cured? → Can’t cure a conflict that doesn’t exist!

Must meet ALL of the requirements to cure:

1) Reasonable belief (OBJECTIVE, NOT SUBJECTIVE) that the lawyer can provide competent and diligent representation to each affected client;
2) Representation NOT prohibited by law;
3) Not representing opposing clients; and
4) Each affected client gives informed consent confirmed in writing

Question 4

True or false: Under Rule 1.7(b), a client can simply say “it’s fine” and the lawyer can proceed with a conflict

Answer 4

False.
1) Reasonable belief (OBJECTIVE, NOT SUBJECTIVE) that the lawyer can provide competent and diligent representation to each affected client

HAS NOTHING TO DO WITH WHAT CLIENTS SAY (Ex: “It’s fine”)

Question 5

True or false: Could there be disclosure issues with clients who want to share representation?

Answer 5

True. Similarly situated clients want to share costs of defense BUT they might also have claims against each other → disclosure conflicts

Question 6

What are the different concurrent conflicts of interest under 1.7?

Answer 6

Current Client-Potential Client
Current Client - Current Client (directly adverse)
Former Client - Current Client
Third person - Client 
Lawyer - Client (indirect)

Question 7

What is the conflict resolution analysis that should be used in Rule 1.7?

Answer 7

1) Identify ALL clients
2) Identify WHO the LAWYER is
You can’t solve the problem if the important parties are not clearly identified

3) Establish whether there is even a conflict in 1.7
+ If yes to conflict → Can representation be undertaken despite a conflict?
AND → do you want to try and remedy so you don’t have to deal with conflict down the road.

+ If yes to conflict and you DO want to remedy the conflict, consult with clients affected by (a) and obtain informed consent in writing in accordance to (b)
+ Clients affected by (a) include both of the clients referred to in (a)(1) and the one or more clients whose representation might be materially limited under (a)(2)

Question 8

How is reasonable attempts to avoid conflicts defined under Rule 1.7?

Answer 8

[3] Reasonable Procedures before taking on a client
Appropriate for size and type of firm and practice
Ignorance caused by failure to institute procedures is no excuse for violations of COI

Question 9

What should a lawyer do if conflicts arise after he’s taken a new client?

Answer 9

Rule 1.7 [4]
If conflicts arise after taking a client
Lawyer MUST withdraw UNLESS informed consent is obtained as described in 1.7(b)

Refer to Rule 1.16

Question 10

What should a lawyer do if changes in firm structure result in conflicts under 1.7?

Answer 10

[5] Changes in the firm or with the client’s structure result in conflicts

It depends, but lawyer may have to withdraw
If so, seek court approval to minimize harm to clients 1.16

Question 11

Can a lawyer’s personal or business interests present a conflict on client’s representation?

Answer 11

Yes. Rule 1.7 [10]
+ Lawyer’s own interest should not have effect on client’s representation
+ Lawyer may not allow related business interests to affect representation

Question 12

If lawyer cannot reasonably conclude that they will provide competent and diligent representation can they proceed with representation?

Answer 12

No. Rule 1.7
If lawyer cannot reasonably conclude that they will provide competent and diligent representation related to Rule 1.1 and Rule 1.3

Question 13

Can a criminal lawyer represent both sides in a murder case?

Answer 13

No.

Question 14

In the process of 1.7(b) conflict curing, the lawyer gets consent from his clients. What should the consent include?

Answer 14

[18] Informed consent requires that each affected client be aware of the relevant circumstances and of the material and reasonably foreseeable ways that the conflict could have adverse effects on the interests of that client. See Rule 1.0(e) (informed consent).

The information required depends on the nature of the conflict and the nature of the risks involved.

When representation of multiple clients in a single matter is undertaken, the information must include:
+ Implications of the common representation, including possible effects on loyalty, confidentiality and the attorney-client privilege
+ The advantages and risks involved.

Question 15

Are there certain conflicts with current clients that are not curable under Rule 1.7(b)’s client consent requirement?

Answer 15

Yes. [19]
Under some circumstances it may be impossible to make the disclosure necessary to obtain consent.

For example, when the lawyer represents different clients in related matters and one of the clients refuses to consent to the disclosure necessary to permit the other client to make an informed decision, the lawyer cannot properly ask the latter to consent.

Question 16

Are there certain reasons why a client would give consent to common representation under 1.7(b)?

Answer 16

[19]
In some cases the alternative to common representation can be that each party may have to obtain separate representation with the possibility of incurring additional costs. These costs, along with the benefits of securing separate representation, are factors that may be considered by the affected client in determining whether common representation is in the client’s interests.

Question 17

True or false: the requirement to get informed consent under 1.7(b)’s conflict cure can be verbal.

Answer 17

False. [20] Ideally, a lawyer should do both: verbal and in-writing.

Paragraph (b) requires the lawyer to obtain the informed consent of the client, confirmed in writing.

The requirement of a writing does not supplant the need in most cases for the lawyer to talk with the client, to explain the risks and advantages, if any, of representation burdened with a conflict of interest, as well as reasonably available alternatives, and to afford the client a reasonable opportunity to consider the risks and alternatives and to raise questions and concerns.

Rather, the writing is required in order to impress upon clients the seriousness of the decision the client is being asked to make and to avoid disputes or ambiguities that might later occur in the absence of a writing.

Question 18

Can a client who gave informed consent while curing a conflict under 1.7(b) revoke the consent?

Answer 18

[20] yes.
A client who has given consent to a conflict may revoke the consent and, like any other client, may terminate the lawyer’s representation at any time.

Whether revoking consent to the client’s own representation precludes the lawyer from continuing to represent other clients depends on the circumstances, including the nature of the conflict, whether the client revoked consent because of a material change in circumstances, the reasonable expectations of the other client and whether material detriment to the other clients or the lawyer would result.

Question 19

Can a lawyer ask a client to sign a waiver of future conflicts when they’re obtaining the client’s informed consent under Rule 1.7(b)?

Answer 19

It depends. [22]

Whether a lawyer may properly request a client to waive conflicts that might arise in the future is subject to the test of paragraph (b).

The effectiveness of such waivers is generally determined by the extent to which the client reasonably understands the material risks that the waiver entails.

+ The more comprehensive the explanation of the types of future representations that might arise and the actual and reasonably foreseeable adverse consequences of those representations, the greater the likelihood that the client will have the requisite understanding.

Ex: if the client agrees to consent to a particular type of conflict with which the client is already familiar, then the consent ordinarily will be effective with regard to that type of conflict.

+ If the consent is general and open-ended, then the consent ordinarily will be ineffective, because it is not reasonably likely that the client will have understood the material risks involved.

+ On the other hand, if the client is an experienced user of the legal services involved and is reasonably informed regarding the risk that a conflict may arise, such consent is more likely to be effective, particularly if, e.g., the client is independently represented by other counsel in giving consent and the consent is limited to future conflicts unrelated to the subject of the representation.

In any case, advance consent cannot be effective if the circumstances that materialize in the future are such as would make the conflict non-consentable under paragraph (b).

Question 20

Is representation of opposing parties in the same litigation allowed? What about simultaneous representation of parties whose interests in litigation may conflict (co-plaintiffs or co-defendants)?

Answer 20

Rule 1.7 [23]

(b) (3) prohibits representation of opposing parties in the same litigation, regardless of the clients’ consent.
(a) (2) Simultaneous representation of parties whose interests in litigation may conflict, such as co-plaintiffs or co-defendants is OK if the 1.7(b) requirements are met

A conflict may exist by reason of substantial discrepancy in the parties’ testimony, incompatibility in positions in relation to an opposing party or the fact that there are substantially different possibilities of settlement of the claims or liabilities in question. Such conflicts can arise in criminal cases as well as civil. The potential for conflict of interest in representing multiple defendants in a criminal case is so grave that ordinarily a lawyer should decline to represent more than one codefendant.

On the other hand, common representation of persons having similar interests in civil litigation is proper if the requirements of paragraph (b) are met.

Question 21

Is advocating a particular legal position for a client that may be adverse to another client for precedent in an unrelated matter a conflict?

Answer 21

No. 1.7 [24]

The mere fact that advocating a legal position on behalf of one client might create precedent adverse to the interests of a client represented by the lawyer in an unrelated matter does not create a conflict of interest.

Question 22

Is it a conflict if there is a significant risk that a lawyer’s action on behalf of one client will materially limit the lawyer’s effectiveness in representing another client in a different case? Give an example.

Answer 22

yes. 1.7 [24]
A conflict of interest exists if there is a significant risk that a lawyer’s action on behalf of one client will materially limit the lawyer’s effectiveness in representing another client in a different case.

Ex: When a decision favoring one client will create a precedent likely to seriously weaken the position taken on behalf of the other client.

Factors relevant in determining whether the clients need to be advised of the risk include:
+ where the cases are pending
+ whether the issue is substantive or procedural
+ the temporal relationship between the matters
+ the significance of the issue to the immediate and long-term interests of the clients involved
+ the clients’ reasonable expectations in retaining the lawyer.

If there is significant risk of material limitation, then absent informed consent of the affected clients, the lawyer must refuse one of the representations or withdraw from one or both matters.

Question 23

Are lawyers that represent classes of persons considered to have a lawyer-client relationship with each member of the class seeking remedy? Does the lawyer need to seek consent from potential conflicts of interest from other clients or the class of persons?

Answer 23

No. 1.7 [25] 
When a lawyer represents or seeks to represent a class of plaintiffs or defendants in a class-action lawsuit, unnamed members of the class are ordinarily not considered to be clients of the lawyer for purposes of applying paragraph (a)(1) of this Rule. 

Thus, the lawyer does not typically need to get the consent of such a person before representing a client suing the person in an unrelated matter. Similarly, a lawyer seeking to represent an opponent in a class action does not typically need the consent of an unnamed member of the class whom the lawyer represents in an unrelated matter.

Question 24

Do conflicts of interests arise outside of litigation?

Answer 24

yes. 1.7(a)

26] Conflicts of interest under paragraphs (a)(1) and (a)(2) arise in contexts other than litigation. For a discussion of directly adverse conflicts in transactional matters, see Comment [7].

Relevant factors in determining whether there is significant potential for material limitation include
+ Duration and intimacy of the lawyer’s relationship with the client or clients involved
+ Functions being performed by the lawyer
+ The likelihood that disagreements will arise and the likely prejudice to the client from the conflict.

The question is often one of proximity and degree.

Question 25

What is an example of a client conflict under 1.7(a) in a transactional case?

Answer 25

[27] Ex: conflict questions may arise in estate planning and estate administration.
A lawyer may be called upon to prepare wills for several family members, such as husband and wife, and, depending upon the circumstances, a conflict of interest may be present.

In estate administration the identity of the client may be unclear under the law of a particular jurisdiction. Under one view, the client is the fiduciary; under another view the client is the estate or trust, including its beneficiaries. In order to comply with conflict of interest rules, the lawyer should make clear the lawyer’s relationship to the parties involved.

Question 26

What are the circumstances under which a conflict is consentable?

Answer 26

[28] Whether a conflict is consentable depends on the circumstances.

A lawyer may not represent multiple parties to a negotiation whose interests are fundamentally antagonistic to each other.

BUT common representation is permissible where the clients are generally aligned in interest even though there is some difference in interest among them. Thus, a lawyer may seek to establish or adjust a relationship between clients on an amicable and mutually advantageous basis

Ex: In helping to organize a business in which two or more clients are entrepreneurs, working out the financial reorganization of an enterprise in which two or more clients have an interest or arranging a property distribution in settlement of an estate. The lawyer seeks to resolve potentially adverse interests by developing the parties’ mutual interests.

Otherwise, each party might have to obtain separate representation, with the possibility of incurring additional cost, complication or even litigation. Given these and other relevant factors, the clients may prefer that the lawyer act for all of them.

Question 27

What are some considerations that a lawyer should think about before taking on common representation under 1.7?

Answer 27

[29] 
A lawyer should be mindful that if the common representation fails because the potentially adverse interests cannot be reconciled, the result can be 
\+ additional cost 
\+ embarrassment
\+ recrimination 

Ordinarily, the lawyer will be forced to withdraw from representing all of the clients if the common representation fails.

In some situations, the risk of failure is so great that multiple representation is plainly impossible. Ex: a lawyer cannot undertake common representation of clients where contentious litigation or negotiations between them are imminent or contemplated.

Other relevant factors are:
+ Whether the lawyer subsequently will represent both parties on a continuing basis
+ Whether the situation involves creating or terminating a relationship between the parties.

Question 28

Is the impartiality requirement for lawyers an impediment to common representation of clients?

Answer 28

Yes. [29]
Because the lawyer is required to be impartial between commonly represented clients, representation of multiple clients is improper when it is unlikely that impartiality can be maintained. Generally, if the relationship between the parties has already assumed antagonism, the possibility that the clients’ interests can be adequately served by common representation is not very good.

Question 29

When a lawyer is representing two clients in the same case, can one client ask that the lawyer not reveal certain information to the other client?

How would a lawyer communicate his policy to both clients?

Answer 29

[31] No.

As to the duty of confidentiality, continued common representation will almost certainly be inadequate if one client asks the lawyer not to disclose to the other client information relevant to the common representation.

This is so because the lawyer has an equal duty of loyalty to each client, and each client has the right to be informed of anything bearing on the representation that might affect that client’s interests and the right to expect that the lawyer will use that information to that client’s benefit. See Rule 1.4.

The lawyer should, at the outset of the common representation and as part of the process of obtaining each client’s informed consent, advise each client that information will be shared and that the lawyer will have to withdraw if one client decides that some matter material to the representation should be kept from the other.

In limited circumstances, it may be appropriate for the lawyer to proceed with the representation when the clients have agreed, after being properly informed, that the lawyer will keep certain information confidential.

ex: the lawyer may reasonably conclude that failure to disclose one client’s trade secrets to another client will not adversely affect representation involving a joint venture between the clients and agree to keep that information confidential with the informed consent of both clients.

Question 30

By default, does a lawyer that represents an entity client thus represent the constituents and affiliates of the entity? What does that mean for the lawyer and constituents/affiliated orgs?

Answer 30

No. [34]

A lawyer who represents a corporation or other organization does not, by virtue of that representation, necessarily represent any constituent or affiliated organization, such as a parent or subsidiary. See Rule 1.13(a).

Thus, the lawyer for an organization is not barred from accepting representation adverse to an affiliate in an unrelated matter, unless the circumstances are such that the affiliate should also be considered a client of the lawyer, there is an understanding between the lawyer and the organizational client that the lawyer will avoid representation adverse to the client’s affiliates, or the lawyer’s obligations to either the organizational client or the new client are likely to limit materially the lawyer’s representation of the other client.

Question 31

Can a lawyer for an organization also serve on the organization’s board of directors?

Answer 31

It depends. [35]
A lawyer for a corporation or other organization who is also a member of its board of directors should determine whether the responsibilities of the two roles may conflict.

The lawyer may be called on to advise the corporation in matters involving actions of the directors. Consideration should be given to the frequency with which such situations may arise, the potential intensity of the conflict, the effect of the lawyer’s resignation from the board and the possibility of the corporation’s obtaining legal advice from another lawyer in such situations.

If there is material risk that the dual role will compromise the lawyer’s independence of professional judgment, the lawyer should not serve as a director or should cease to act as the corporation’s lawyer when conflicts of interest arise.

The lawyer should advise the other members of the board that in some circumstances matters discussed at board meetings while the lawyer is present in the capacity of director might not be protected by the attorney-client privilege and that conflict of interest considerations might require the lawyer’s recusal as a director or might require the lawyer and the lawyer’s firm to decline representation of the corporation in a matter.