Conflicts of Interest - Frequently Asked Questions

How many claims come from conflicts of interest issues?

Expand to Read More >

A study conducted by the ABA revealed that:

  • Allegations of conflict of interest were made in 1,931 claims in 2011 alone.
  • The incidence of substantive error claims, which include conflicts of interest claim, has been consistently high over the last 26 years, averaging 47.78% of all claims.
  • In 2011, substantive error claims accounted for 45.07% of all legal malpractice claims.
  • Legal malpractice claims, have increased from 28,455 claims in 2007 to 45,075 claims in 2011.

1 See ABA Standing Committee on Lawyer’s Professional Liability, Profile of Legal Malpractice Claims: 2008-2011 11 (2012).

What is a concurrent conflict?

Expand to Read More >

Normally, a concurrent conflict arises when a lawyer simultaneously represents either two current clients or a current client and a prospective client while owing duties to both.2


2 See MODEL RULES OF PROF’L CONDUCT R. 1.7 cmt. 1 (1983), available here; MODEL RULES OF PROF’L CONDUCT R. 1.7 cmt. 3 (1983), available here.

How do courts regard conflicts of interest?

Expand to Read More >

Always be sure to check your local jurisdiction for any variation in interpretation or in the rules themselves.

What should lawyers generally consider with a concurrent conflict?

Expand to Read More >

  • Direct Adversity
    • Lawyers are typically prohibited from representing two clients at the same time if the representation of one will be directly adverse to the other.3
  • Material Limitation
    • Lawyers generally should not represent two clients at the same time if there is a significant risk that representation of one or more clients will be materially limited by the lawyer’s responsibilities to another client, former client, third party, or by a lawyer’s own personal interest.4
    • What Could Potentially Constitute a Material Limitation?
      • A lawyer’s duties to a trust, corporate board, estate, potential partners, joint ventures, a third-party paying lawyer’s fees.
      • The monetary, property, and business interest of the client, as well as the monetary, property, business, and personal interests of the lawyer.
      • Interests of family, relatives, or close friends.

3 See MODEL RULES OF PROF’L CONDUCT R. 1.7(a)(1) (1983), available here.

4 See MODEL RULES OF PROF’L CONDUCT R. 1.7(a)(2) (1983), available here.

Are concurrent conflicts ever allowed?

Expand to Read More >

Under Model Rule 1.7(b), a lawyer generally may represent two clients with a current conflict if four criteria are satisfied.  However, always be sure to check your jurisdiction for variation.  MODEL RULES OF PROF’L CONDUCT R. 1.7(b) (1983).

  • Reasonable: A lawyer reasonably believes she can perform competent and diligent representation to each client;5
  • What are Possible Examples of Unreasonable Representation?
    • Representation may be unreasonable if the clients are directly adverse and a disinterested lawyer would counsel against consent to dual representation.
    • Representation could be unreasonable if a lawyer would necessarily take adverse action against a client for the lawyer’s own interests or for the interests of another client.
      • What are Possible Examples of Taking Adverse Action Against a Client?
        • Foreclosing or attaching client property;
        • negotiating against a client; or
        • arguing to impose liability on the client.
  • Legal: The representation is not prohibited by law;6
  • Clients Are Not Adverse In Litigation: Representation does not involve one client suing another client;7   there are no exceptions to the rule that an attorney cannot represent adverse parties in litigation. This conflict cannot be waived.
  • It would be wise for a lawyer to avoid representing both parties in a divorce suit given this rule.
  • Informed Consent Obtained: In some situations, conflicts can be waived where each affected client gives informed consent in writing.8 However, this can be tricky given that it is often difficult to provide all the information needed to allow fully informed consent.

5 See MODEL RULES OF PROF’L CONDUCT R. 1.7(b)(1) (1983), available here.

6 See MODEL RULES OF PROF’L CONDUCT R. 1.7(b)(2) (1983), available here.

7 See MODEL RULES OF PROF’L CONDUCT R. 1.7(b)(3) (1983), available here.

8 See MODEL RULES OF PROF’L CONDUCT R. 1.7(b)(4) (1983),available here.

Can doing business with a client create a concurrent conflict?

Expand to Read More >

Under Model Rule 1.8(a), lawyers are generally discouraged from entering into business transactions with clients.9

However, it may be possible for a lawyer to enter into a business deal by satisfying the conditions in Model Rule 1.8(a).

  • Fair Terms: The transaction and terms on which the lawyer acquires the pecuniary interest are fair and reasonable.10
  • Disclosure: The terms are plainly explained to the client and in writing.11
  • Independent Counsel: The client is encouraged in writing to seek advice regarding the transaction from an independent lawyer.12
  • Informed Consent: The client consents in writing to the deal and to the lawyer’s role in the transaction after being fully informed of all material terms.13

9 See Model Rules of Prof’l Conduct R. 1.8(a) (1983), available here.

10 Id.

11 Id.

12 Id. 

13 Id.

Does Rule 1.8 apply to all business transactions?

Expand to Read More >

Generally, Model Rule 1.8 applies to business transactions between the lawyer and client regardless of whether the transaction is related to the representation.14

However, every contract the lawyer enters into is typically not subject to the rule so long as the client is not a party to the contract.15


14 See Model Rules of Prof’l Conduct R. 1.8 cmt. 1(1983), available here.

15 Id.

Are there tips to avoid concurrent conflicts in a business transaction?

Expand to Read More >

A prudent lawyer would not:

  • Provide financial assistance to a client16
  • Borrow money from a client
  • Remove money from a client’s escrow or other account
  • Make a sale to a client
  • Enlist a client to invest in a business venture

An attorney can take property as fee, but must be careful that it doesn’t give him or her a stake in any matter involving the representation, or result in the attorney doing business with the client.


16 See Model Rules of Prof’l Conduct R. 1.8(e) (1983) (explaining additional nuances relating to financial assistance to clients), available here.

May a lawyer take action against the client's interest?

Expand to Read More >

Typically, an attorney may not take action against a client’s interest unless the client gives informed consent or the action would not disadvantage the client.17

Are there exceptions?

  • The use of confidential information for the benefit of the lawyer or another client is often allowed when the client gives informed consent, or the use would not disadvantage the client.  However, regardless of the permissibility of using the information, disclosure of the information is not allowed.18
  • Some states follow the Restatement (Third) of the Law Governing Lawyers under which confidential information may not be used if the use harms a client’s material interest, or the client directs the lawyer not to use it.   The best practice is to always inform the client of any use of the information.  As always, be sure to check your local rules for any variations.

17 See MODEL RULES OF PROF’L CONDUCT R.1.8 cmt. 5 (1983), available here.

18 Id.

Can a lawyer accept gifts from a client?

Expand to Read More >

Generally, a lawyer may receive modest, unsolicited gifts from clients.20

However, a lawyer should not solicit gifts from a client, or accept unsolicited substantial gifts (including bequests) unless the client is a close relative.21


20 See Model Rules of Prof’l Conduct R.1.8(c) (1983), available here.

21 Id

May a lawyer receive publication rights during the course of representation?

Expand to Read More >

Before a case has concluded, a lawyer should not negotiate for or obtain publication rights based on the circumstances of the representation.22

After a representation is terminated or a case ends, a lawyer may arrange to receive publication rights based on the facts of the representation.23

Additionally, a lawyer may arrange to receive publication rights during representation if the publication rights are not based on the circumstances of the representation.24


22 See MODEL RULES OF PROF’L CONDUCT R. 1.8(d) (1983), available here.

23 Id.

24 Id.

May a lawyer provide financial assistance to a client?

Expand to Read More >

Typically, a lawyer may provide financial assistance to a client by paying court costs and litigation expenses in advance.25

However, the client is usually responsible for reimbursing the lawyer for the amount of these funds once recovery is obtained unless the client is indigent.26


25 See Model Rules of Prof’l Conduct R. 1.8 cmt. 10 (1983), available here.

26 See Model Rules of Prof’l Conduct R. 1.8(e) (1983), available here.

What is a successive conflict?

Expand to Read More >

Usually, a successive conflict arises between an existing client and a former client when there is sequential representation by the same lawyer. For example, when a lawyer moves to a new firm and represents a client whose interests are adverse to a client of the former firm, a successive conflict can arise.

How do courts regard conflicts of interest rules?

Expand to Read More >

Ethical rules are only a guide for the courts.  Ultimately, the court has the final say in determining whether it was acceptable for a lawyer to take a case.

Always check your local rules and their interpretation by the courts.

Does a lawyer owe duties to a former client?

Expand to Read More >

Lawyers are generally prohibited from using confidential information in any manner that disadvantages a former client, unless the use is allowed under Rule 1.6 or the information becomes generally known.27 The use of the information should not be revealed except as allowed by Rule 1.6.


27 See Model Rules of Prof’l Conduct R.1.9(c)(1) (1983), available here<.

May a lawyer represent a current client against a former client?

Expand to Read More >

Generally, a lawyer cannot represent a current client against a former client when the representation involves the same or a substantially related matter and the interests of the two clients are material adverse28. However, in some circumstances, the conflict with the former client may be cured if the former client gives informed consent in writing29.


28 See Model Rules of Prof’l Conduct R. 1.9(a) (1983), available here.

29 Id.

May a lawyer represent a current client against his former law firm's client?

Expand to Read More >

If an attorney moves to a new law firm, he or she cannot ordinarily represent a client of the new firm in a matter that is adverse to a client of the former law firm when all three of these factors are present:

  • Same or Substantially Related Matter: The representation deals with the same or a substantially related matter;30
  • Materially Adverse: The interests of the current or prospective client are materially adverse to the interests of the former client;31 and,
  • Confidential Information: The lawyer acquired confidential information protected by Rule 1.6 or Rule 1.9(c).32

However, in some circumstances, the conflict with the former client may be cured if the former client gives informed consent in writing.33


30 See Model Rules of Prof’l Conduct R. 1.9(b) (1983), available here.

31 See Model Rules of Prof’l Conduct R. 1.9(b)(1) (1983), available here.

32 See Model Rules of Prof’l Conduct R. 1.9(b)(2) (1983), available here.

33 Id.

What does "same matter" mean?

Expand to Read More >

A matter is the same if “the lawyer was so involved…that the subsequent representation can be justly regarded as a changing of sides”.34


34 See Model Rules of Prof’l Conduct R. 1.9 cmt. 2 (1983), available here.

What does "substantially related matter" mean?

Expand to Read More >

A matter is substantially related where there is a possibility that confidences obtained from a former client during the representation of a matter might be used adversely to that former client.35

As long as the information could be useful, there is a possibility of misuse. Actual misuse is generally not required.36


35 See Model Rules of Prof’l Conduct R. 1.9 cmt. 3 (1983), available here.

36 Id.

Can informed consent cure former client conflicts?

Expand to Read More >

Usually, conflicts with former clients can be cured by informed consent and waiver of the conflict.  Realistically, however, former clients rarely have any incentive to provide consent given that the attorney relationship has ended.37

Moreover, keep in mind that even if consent is provided by the former client, consent also needs to be obtained by the new client under Rule 1.7.


37 See Model Rules of Prof’l Conduct R. 1.9 cmt. 9 (1983), available here.

What is the difference between a former client and current client?

Expand to Read More >

Determining whether an attorney/client relationship remains active is not as easy as it seems.  Several factors can help in deciding whether the relationship has ended, although none are determinative. Factors to be considered are:

  • The complexity of the legal services provided
  • The length of time that the legal representation lasted
  • Whether the attorney and the client continue active communications
  • Whether the attorney or the law firm holds funds in escrow
  • Whether there are any outstanding invoices for services rendered
  • If the client has paid a retainer and the retainer has not been exhausted by payment of fees
  • Whether the lawyer has sent the client a letter informing the client that the attorney/client relationship has ended

When in-house counsel severs employment, does the former employer become a former client under the rules?

Expand to Read More >

Generally, the company is not a former client with respect to all legal matters involving the company during the employment of in-house counsel.

A company qualifies as a former client with respect to those matters the lawyer worked on, and with respect to any matter on which the lawyer received confidential information.38.

Conflicts can also arise under Model Rule 1.9(c) as the result of the substantial amounts of information lawyers receive during long-term employment relationships, creating the potential for future misuse.


38 SeeModel Rules of Prof’l Conduct R. 1.9(a) (1983), available here; Model Rules of Prof’l Conduct R. 1.9(b) (1983), available here.

What if the lawyer discovers a conflict during an existing relationship?

Expand to Read More >

A lawyer has several options when a potential conflict between a current client and a former client is discovered while a representation of a client is ongoing.

  • Carefully assess whether a true conflict exists.  If not, then the lawyer is generally free to move on with the representation.
  • The lawyer may, after full disclosure to the client and after ensuring that withdrawal will not prejudice the client in any material way, withdraw from the matter.
  • The lawyer may obtain informed consent from both clients.  However, there is likely no incentive for the former client to consent.

What is an imputed conflict?

Expand to Read More >

Typically, imputed conflicts arise between a lawyer’s current or former client, and a different lawyer’s current or former client, when the two lawyers are or were practicing in the same firm.

What is the imputed conflict of interest standard?

Expand to Read More >

Under Model Rule 1.10, all partners, members, associate attorneys, or colleagues at the same firm or law office constitute the same lawyer.39

Lawyers in the same law firm are required to determine whether the clients of their partners and associates present conflicts of interests with their own clients. For example, if a conflict of interest exists as the result of a single lawyer representing two clients, then the same conflict exists if different lawyers in the same firm represent each client separately.


39 See MODEL RULES OF PROF’L CONDUCT R. 1.10(a) (1983), available here.

When can a former government lawyer represent persons or entities that were involved in matters that the lawyer formerly handled?

Expand to Read More >

Generally, former government lawyers are prohibited from representing a client in “a matter in which the lawyer participated personally and substantially” while employed by the government.40 Note that former government lawyers are held to Rule 1.11(a) instead of the direct adversity and material limitations standards in Rule 1.9(a).

What is a “Matter”?

  • Typically, a matter comprises a proceeding, application, request for a determination, contract, claim, controversy, investigation, charge, accusation, arrest, or other particular matter regarding a specific party or parties41.
  • A matter pertains to the issues of a specific party or parties, and does not involve every substantive issue in which the lawyer was involved42.
  • A matter may also continue on in another form depending on whether it has the same basic facts, same or related parties, and the time elapsed43.

40 See Model Rules of Prof’l Conduct R. 1.11(a) (1983), available here.

41 See Model Rules of Prof’l Conduct R. 1.11(e)(1) (1983), available here.

42 See Model Rules of Prof’l Conduct R.1.11 cmt. 4 (1983), available here.

43 See Model Rules of Prof’l Conduct R.1.11 cmt. 10 (1983), available here.

Can informed consent cure former government lawyer conflicts?

Expand to Read More >

Usually, the lawyer may participate in the representation so long as the relevant agency gives informed consent before the lawyer takes on the matter.44


44 See MODEL RULES OF PROF’L CONDUCT R. 1.11(a)(2) (1983), available here.

What steps can be taken to avoid conflicts when hiring former government lawyers?

Expand to Read More >

Screening: One of the major problems that arise when hiring a former government lawyer is that other lawyers at the law firm are precluded from representing an affected client when a conflict arises with the former government lawyer under Model Rule 1.11(a). However, when certain conditions are satisfied, a law firm may follow a screening process to avoid conflicts with government lawyers.45 A law firm should screen the former government lawyer from participating in, or receiving information about, the conflicting representation.46 See Model Rule 1.0(k) for more information on screening procedures.

Fees: The former government lawyer may not receive a fee associated with the conflicting representation apart from his or her normal salary or partnership share.47

Notice: The law firm should provide notice to the relevant government agency with a “description of the screened lawyer’s prior representation and of the screening procedures employed.”48 Informed consent is generally not required under these circumstances.49


45 See MODEL RULES OF PROF’L CONDUCT R. 1.11(b) (1983), available here.

46 See MODEL RULES OF PROF’L CONDUCT R. 1.11(b)(1) (1983), available here.

47 See MODEL RULES OF PROF’L CONDUCT R. 1.11 cmt 6. (1983), available here.

48 See MODEL RULES OF PROF’L CONDUCT R.1.11 cmt. 7 (1983), available here.

49 See MODEL RULES OF PROF’L CONDUCT R. 1.11(b)(2) (1983), available here.

May a present government lawyer represent a former client?

Expand to Read More >

Generally, present government lawyers are precluded from representing a client in “a matter in which the lawyer participated personally and substantially” while formerly employed in private practice.50

Government lawyers must follow Rule 1.11(a), as well as the direct adversity and material limitation standards found in Rule 1.9(a)-(c).51

Government lawyers must also comply with the requirements regarding concurrent conflicts found in Rule 1.7.52


50 See MODEL RULES OF PROF’L CONDUCT R. 1.11(d)(2) (1983), available here.

51 See MODEL RULES OF PROF’L CONDUCT R. 1.11(d)(1) (1983), available here.

52 Id.

May a former law clerk represent a former client?

Expand to Read More >

In general, lawyers should not represent a client in a matter in which they participated personally and substantially as a law clerk unless all parties consent in writing.53


53 See MODEL RULES OF PROF’L CONDUCT R. 1.12(a) (1983), available here.

What can law firms do to prevent a conflict when hiring former law clerks?

Expand to Read More >

Screening: One of the major problems that arise when hiring law clerks is that other lawyers at the firm are typically prohibited from representing an affected client when a conflict arises with a former law clerk.54 However, when certain conditions are satisfied, a law firm may follow a screening process to avoid conflicts with law clerks.55 A law firm should screen the former law clerk from participating in, or receiving information about, the conflicting representation.56

Fees: The former law clerk may not receive a fee associated with the conflicting representation apart from his or her normal salary or partnership share.57

Notice: The law firm should provide notice to the former employer or government agency with a “description of the screened lawyer’s prior representation and of the screening procedures employed.”58


54 See MODEL RULES OF PROF’L CONDUCT R.1.12 (c) (1983), available here.

55 Id.

56 See MODEL RULES OF PROF’L CONDUCT R.1.12(c)(1) (1983), available here. For more information on screening procedures, see Model Rule 1.0(k). MODEL RULES OF PROF’L CONDUCT R. 1.0(k) (1983) available here.

57 See MODEL RULES OF PROF’L CONDUCT R. 1.12 cmt. 4 (1983), available here.

58 See MODEL RULES OF PROF’L CONDUCT R. 1.12 cmt. 5 (1983), available here.

Who is a prospective client?

Expand to Read More >

A prospective client is one who consults with a lawyer about the possibility of forming an attorney-client relationship involving a particular case or other legal matter.59

A person who communicates with the lawyer in an attempt to disqualify the lawyer is not a prospective client.60

    What is a Consultation?
  • There is generally no bright-line rule detailing what qualifies as a consultation. However, factors considered usually include the time and depth of the communication,61 keeping in mind that communications may be written, oral, or electronic depending on the circumstances.62

When in doubt about whether to accept representation on any matter, lawyers would be wise not to specifically request information through any medium without providing the potential client with detailed warnings limiting the lawyer’s liability. If the person responds and provides information, then a consultation is more likely to have occurred.63

Conversely, if a lawyer receives information in response to advertising that simply lists the lawyer’s education, experience, practice areas, and contact information, then a consultation is not as likely to have occurred.64


59 See MODEL RULES OF PROF’L CONDUCT R. 1.18(a) (1983), available here.

60 See MODEL RULES OF PROF’L CONDUCT R.1.18 cmt. 2 (1983), available here.

61 Id.

62 Id.

63 Id.

64 Id.

May a lawyer reveal information learned from a prospective client?

Expand to Read More >

Even when no attorney-client relationship materializes, a lawyer generally should not reveal information learned from a prospective client unless the disclosure is allowed by Rule 1.9, concerning former clients.65


65 See MODEL RULES OF PROF’L CONDUCT R. 1.18(b) (1983), available here.

What might happen if a prospective client reveals information that is harmful to a current client?

Expand to Read More >

Normally, a lawyer is prohibited from continuing representation of a current client if the lawyer learns information from a current or prospective client that may be “significantly harmful” if revealed to the current client.66

How Could the Law Firm Be Affected?

Generally, a law firm may not continue representing a current client when a lawyer learns information from a prospective or other client that may be “significantly harmful” if revealed to the client.67

However, sometimes a law firm may continue representation of the current client under the two approaches described in Model Rule 1.18(d)(1) and Model Rule 1.18(d)(2):

  • Informed Consent: The law firm should obtain informed consent from both the current client and prospective client.68
  • Another possibility exists when the disqualified lawyer took reasonable steps to limit receiving more disqualifying information than was necessary to determine forming an attorney-client relationship, and the law firm complies with several other requirements as well:69
    • Screening Process: A law firm should screen the lawyer from participating in, or receiving information about, the conflicting representation.70
    • Fees: The lawyer may not receive a fee associated with the conflicting representation apart from his or her normal salary or partnership share.71
    • Notice: The law firm should provide notice to the prospective client with a “description of the subject matter about which the lawyer was consulted, and of the screening procedures employed.”72

66 See MODEL RULES OF PROF’L CONDUCT R.1.18(c) (1983), available here.

67 Id.

68 See MODEL RULES OF PROF’L CONDUCT R. 1.18(d)(1) (1983), available here.

69 See MODEL RULES OF PROF’L CONDUCT R. 1.18(d)(2) (1983), available here.

70 See MODEL RULES OF PROF’L CONDUCT R. 1.18(d)(2)(i) (1983), available here. For more information on screening procedures, see Model Rule 1.0(k).  MODEL RULES OF PROF’L CONDUCT R. 1.0(k) (1983) available here.

71 See MODEL RULES OF PROF’L CONDUCT R.1.18 cmt. 7 (1983), available here.

72 See MODEL RULES OF PROF’L CONDUCT R.1.18 cmt. 8 (1983), available here.

How might a lawyer avoid prospective client conflicts?

Expand to Read More >

Pre-Consultation Informed Consent Agreement: Making any consultation conditional upon the prospective client providing informed consent indicating that any information revealed during the consultation will not bar the lawyer from representing a different client in the matter.73 A lawyer may also wish to expressly provide in the agreement that the prospective client consents to the lawyer’s subsequent use of information conveyed by the prospective client.74


73 See MODEL RULES OF PROF’L CONDUCT R.1.18 cmt. 5 (1983), available here.

74 Id.

 

Back to Topic >

Back to Topics List >

 

Risk Management Best Practices Database Legal Statement

Information provided by Attorney Protective is not intended as legal advice. This publication provides best practices for use in connection with general circumstances, and ordinarily does not address specific situations. These best practices are not intended to meet or establish the standard of care, and sometimes recommend practices that exceed the standard of care. Specific situations should be discussed with legal counsel licensed in the appropriate jurisdiction. By publishing practice and risk prevention tips, Attorney Protective neither implies nor provides any guarantee that claims can be prevented by use of the suggested practices. Though the contents of Attorney Protective's Best Practice Database have been carefully researched, Attorney Protective makes no warranty as to the accuracy, applicability or timeliness of the content. Anyone wishing to reproduce any part of the Attorney Protective Best Practices Database content must request permission from Attorney Protective by calling 877-728-8776 or sending an email to erin.mccartney@attorneyprotective.com. Additionally the rules cited in the contents of this database may have since changed. You should check the laws and model rules in your state for specific information on the topics addressed here.