Special Conflict Issues: Multiple Clients - June 22 & 23 Flashcards
May a lawyer represent multiple clients who are asserting claims against one another in the same litigation if the clients give informed consent? (Q)
No. A lawyer may not represent clients who are formally opposed in litigation, i.e., who are asserting claims against one another, even if the clients give informed consent. A conflict like this is considered to be too fundamental and too serious to be consentable.
Under the Model Rules of Professional Conduct (MRPC), should a lawyer ordinarily agree to represent multiple defendants in a criminal case? (Q)
No. Under the MRPC, a lawyer ordinarily should not agree to represent multiple defendants in a criminal case. Although representation of this type is not absolutely prohibited by the MRPC, the potential for conflicts of interest is so great, and so fundamental to the representation, that the MRPC counsel strongly against it. In particular, a criminal case against multiple defendants often raises the possibility that one codefendant will strike a bargain with prosecutors to testify against other codefendants in exchange for leniency or a reduced sentence. Clients in that position are too fundamentally adverse to one another to permit joint representation.
If a lawyer seeks to represent in a single matter multiple clients whose interests are not directly opposed, but which may diverge from one another, is it possible for a conflict of interest to exist even though the clients are not formal adversaries in the matter? (Q)
Yes. If a lawyer seeks to represent in a single matter multiple clients whose interests are not directly opposed, but which may diverge, a conflict exists if there is a significant risk that the lawyer’s representation of any client will be materially limited by the lawyer’s responsibilities to another client (i.e., if there is a material-limitation conflict of interest).
In evaluating potential conflicts in this situation, the lawyer should consider factors such as:
the duration and depth of the relationship with each client;
the lawyer’s function in the matter (e.g., advisor, negotiator, or advocate);
the likely prejudice to one client from conflict with others;
the likelihood that the clients’ interests will diverge; and
whether a divergence in client interests will interfere with the lawyer’s professional judgment in considering reasonable alternatives or courses of action for each client.
A banker, an architect, and a developer wanted to establish a real estate company. The banker would provide the initial seed money and financing, the architect would provide the architectural services, and the developer would provide the land for the initial real estate development. The banker, architect, and developer contacted a lawyer to assist them in forming their joint venture.
Does a conflict of interest exist for the lawyer? (Q)
Yes. A conflict of interest exists. A material-limitation conflict of interest exists if there is a significant risk that a lawyer’s ability to consider, propose, or execute a course of action for a client will be materially limited due to the lawyer’s other responsibilities or interests. If several people engage a lawyer to form a joint venture, the lawyer’s ability to recommend all possible positions that any one person might take will be materially limited by the lawyer’s duty of loyalty to the other members of the proposed joint venture.
Here, the banker, architect, and developer likely had different opinions on issues such as compensation and shares of ownership in the joint venture. These competing interests could materially limit the lawyer’s ability to recommend all the options in the best interest of each individual. Thus, a material-limitation conflict of interest exists.
Does a concurrent conflict of interest arise if a lawyer represents one client in a matter that is directly adverse to another client, even if the lawyer does not represent both clients in the same matter? (Q)
Yes. A concurrent conflict of interest arises if a lawyer represents one client who is directly adverse to another, even if the lawyer does not represent both clients in the same matter. This rule applies to both litigation and transactional representation. A lawyer who wishes to undertake representation that is directly adverse to another client must either obtain informed consent or withdraw from the representation.
This situation should be distinguished from a situation in which a lawyer seeks to represent directly adverse clients in the same matter. A conflict of that type is not consentable; i.e., it cannot be waived by either client.
Do the MRPC always prohibit a lawyer from taking inconsistent legal positions in different cases if any of those cases might create a precedent that is adverse to one of the lawyer’s other clients? (Q)
No. A lawyer is not always prohibited from taking inconsistent legal positions in different cases. The mere risk of creating adverse precedent for a different client in a separate matter is not inherently a conflict of interest.
However, a conflict could arise if a lawyer’s advocacy on behalf of one client materially limits the lawyer’s ability to effectively represent another client, e.g., if the lawyer’s advocacy creates precedent that is not merely adverse to another client, but rather seriously weakens the other client’s legal position. To assess potential conflicts in this situation, the lawyer should consider factors such as:
the significance of the issue to the clients,
the clients’ reasonable expectations of the lawyer, and
the nature of the relationship between the matters.
If a conflict does exist, the lawyer must either obtain informed consent or withdraw from the representation.
May a lawyer disclose information relating to the representation of a current or former client in assessing conflicts of interest? (Q)
Yes. A lawyer may disclose information relating to the representation of a current or former client to detect and address conflicts of interest arising from changes in the lawyer’s employment or changes to the composition of a law firm. However, the lawyer may do so only to the extent that the disclosure would not violate the attorney-client privilege or prejudice the client. The disclosure typically should include, at most: (1) the identity of the client and other parties; (2) a brief, general summary of the issues; and (3) whether the matter has concluded.
A lawyer represented a woman in various tax matters. The lawyer also represented a local baker in various employment matters. One day, while the woman was walking down the street, she was hit by the baker’s delivery truck and suffered injuries. The woman called the lawyer and said she wanted the lawyer to sue the baker on the woman’s behalf.
Does the lawyer need to obtain informed consent from both the woman and the baker before the lawyer may take on the representation of the woman to sue the baker? (Q)
Yes. The lawyer must obtain both clients’ informed consent before taking the representation. Loyalty to a current client prohibits a lawyer from undertaking a representation that is directly adverse to that client without first obtaining the client’s informed consent. In other words, without informed consent, a lawyer may not advocate against a client in one matter if the lawyer represents that client in another matter—even if the matters in question are unrelated.
Here, the woman and the baker are existing clients of the lawyer, and the woman’s potential lawsuit against the baker is directly adverse to the baker. If the lawyer takes the case, the baker might feel betrayed, and the woman might wonder if the lawyer is putting full effort into a case against one of the lawyer’s other clients. Thus, the lawyer cannot take on the matter without first obtaining both clients’ informed consent.
If a lawyer represents multiple clients in a matter, under what conditions may the lawyer participate in arranging a collective settlement of civil claims or a collective plea agreement to criminal charges? (Q)
If a lawyer represents multiple clients in a matter, the lawyer may participate in arranging a collective settlement of civil claims or a collective plea agreement to criminal charges only if:
each client gives informed consent in a signed writing, and
the lawyer discloses all claims or pleas involved, as well as the participation of each person in the arrangement.
This rule applies both to an individual lawyer and to all lawyers in that lawyer’s firm. Regardless of any conflict or waiver, each client retains the right to decide for herself whether to settle the matter on the terms arranged.
In general, is a lawyer permitted to solicit a substantial gift from a client or to prepare on the client’s behalf any document giving a substantial gift to the lawyer? (Q)
