A global law firm recently embarrassed itself by not doing a simple conflicts check. As Joe Patrice in his blog post for Above the Law explains, Dentons’ attorneys shot off a letter demanding a retraction from CNN for a story on possible ethics issues with Trump’s nominee for Secretary of Health and Human Services, Rep. Tom Price, before a “simple conflict check” revealed that Dentons also represents CNN. You can do better than that. Create a conflicts check system and use it.
Before accepting a new case, it’s imperative to ensure that no conflict of interest exists. Under Cal Rules of Prof Cond 3–310, an attorney can’t agree to represent conflicting interests without all affected past and present clients’ informed written consent.
The rules prohibiting conflicting representation flow from affirmative duties owed by the attorney and are designed to protect clients, attorneys, and the legal system. See Cal Rules of Prof Cond 1–100. These duties include the obligation to act with undivided loyalty on the client’s behalf. And there’s a fiduciary duty that limits the attorney’s ability to take on the representation of clients whose interests may be adverse to those of existing clients, former clients, the attorney, or the attorney’s firm.
Conflicts of interest arise when an attorney’s performance of these duties is inhibited. The best way to avoid conflicts of interest is to create a conflicts check system that allows you to identify potential conflicts before agreeing to accept employment. The system should provide a means of checking for names of
- current and former clients,
- corporate parents and affiliates of current and former clients,
- principal officers and directors,
- fictitious business names,
- persons who have consulted with your firm,
- current or former adversaries,
- nonclients who have a substantial economic relationship with your firm (e.g., CPAs), and
- companies or institutions for whom attorneys in the firm have served or are serving as directors, officers, or trustees.
If you’ve left a prior firm to establish your own practice, consider whether a prospective new client may have a conflict with a client you previously represented at your former firm. And check for any conflicting interests that you may personally have in the present matter.
There are many computer programs, and even some smartphone applications, that will handle conflict checks.
Failing to use a conflicts check system can not only be embarrassing, as it was for Dentons, it can mean losing a good client. You might get confidential information from a potential new client that would disqualify you from continuing to represent an existing client, even if you decide not to accept representation of the new client.
For more on avoiding conflicts of interest, turn to CEB’s California Civil Procedure Before Trial, chap 2. And get sample letters to use when you’re seeking consent to representation after disclosing a conflict of interest in CEB’s California Client Communications Manual: Sample Letters and Forms, chap 4.
Other CEBblog™ posts you may find useful:
- Tricky Business: Representing Clients with Adverse Interests
- 5 Ground Rules to Explain to Your New Client
- Better Send a Letter Before the First Consultation
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