One of the most challenging aspects of running a law firm involves the conflicts check. This challenge is amplified when there are multiple parties and misperceptions about the attorney's duty to each party. The key in handling murky conflict matters involves setting appropriate expectations.
In order to understand the conflicts check, it is necessary to not only use technology to aide in doing the check, but also to understand the basic rules. Merely relying on computers to do the conflicts check is not advisable. While each jurisdiction has slightly different rules, there are two general rules. A lawyer cannot simultaneously represent a client on a matter where the client's interests are adverse to another existing client. A lawyer cannot represent a client where the lawyer's abilities are materially limited by the lawyer's responsibilities to other parties.
Once the attorney had identified a conflict, there are two courses of action -- refusing representation or assessing the conflict further. If the attorney is able to reasonably conclude that representation clients with conflicting interests can be accomplished without affecting the quality of representation of each party and, with each client's informed consent, the attorney may choose to proceed with the engagement. This analysis hinges on getting a waiver and consent. In order to get effective waiver and consent, there is a two part test. First, an attorney must reasonably conclude that conflicting representation will not be a detriment to either party and second, the attorney must get each party's informed consent.
What is Consent?
Under the rules, an attorney must get informed consent, granted voluntarily and knowingly, after full disclosure of all relevant information. This requirement must be parsed out to prevent any shortcomings. The consent must be informed. In order to be "informed," the person giving such consent must have full disclosure. Full disclosure does not involve speculation, but rather a complete explanation of risks.
Once you have received "informed consent," each client's consent must be memorialized in writing. An appropriate document should include at least the following:
1. A detailed explanation of the conflict. The description of the conflict should include as much detail as possible. Again, this should not involve speculation, but rather an explanation of reasonable consequences.
2. A description of the reason for asking for the consent.
3. A description of the methods used to maintain the confidences of each client. It is very important for clients to understand the nature of their right of confidentiality and how this right is handled when dealing with multiple parties. It might be appropriate to present various hypotheticals to the clients in order for them to understand the full limitation of this duty to each client.
4. Notice that each party had the right and access to independent counsel in rendering consent. Some attorneys even go so far as to hire outside attorneys to advise clients on their rights.
5. The actions to be taken in case one party withdraws consent. Attorneys should be very specific in writing this clause and setting specific remedies. Importantly, the disgorgement of fees must explicitly be excluded as a remedy.
6. Each party's signature and a notice that the consent is being sent to both parties. Even with informed consent, an attorney does not have a guarantee that the conflict will not cause future problems. As a result, attorneys are best served by being hyper-vigilant when representing multiple parties in the same matter.