LAW 565-001 – Professional Responsibility

Conflict of Interest


Concurrent Conflict of Interest
  1. . . . . A concurrent conflict of interest exists if:
    1. the representation of one client will be directly adverse to another client; 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.

Taking inconsistent positions creates a conflict of interest if there is a significant risk that it will materially limit the representation of one client by the precedent established for another.

Only economic conflicts between clients does not constitute a conflict of interest.

  1. Notwithstanding the existence of a concurrent conflict of interest under paragraph (a), a lawyer may represent a client if:
    1. the lawyer reasonably believes that the lawyer will be able to provide competent and diligent representation to each affected client;
    2. the representation is not prohibited by law;
    3. the representation does not involve the assertion of a claim by one client against another client represented by the lawyer in the same litigation or other proceeding before a tribunal; and
    4. each affected client gives informed consent, confirmed in writing.

Confirmed in writing does not mean it has to be signed.

A lawyer may represent both parties in a transaction as long as it comports with Rule 1.7.

Whether one can represent both a husband and a wife in a divorce depends on the state.

Prospective Client
  1. A person who consults with a lawyer about the possibility of forming a client-lawyer relationship with respect to a matter is a prospective client.
  2. Even when no client-lawyer relationship ensues, a lawyer who has learned information from a prospective client shall not use or reveal that information, except as Rule 1.9 would permit with respect to information of a former client.
  3. A lawyer subject to paragraph (b) shall not represent a client with interests materially adverse to those of a prospective client in the same or a substantially related matter if the lawyer received information from the prospective client that could be significantly harmful to that person in the matter, except as provided in paragraph (d). If a lawyer is disqualified from representation under this paragraph, no lawyer in a firm with which that lawyer is associated may knowingly undertake or continue representation in such a matter, except as provided in paragraph (d).
  4. When the lawyer has received disqualifying information as defined in paragraph (c), representation is permissible if:
    1. both the affected client and the prospective client have given informed consent, confirmed in writing, or:
    2. the lawyer who received the information took reasonable measures to avoid exposure to more disqualifying information than was reasonably necessary to determine whether to represent the prospective client; and
      1. the disqualified lawyer is timely screened from any participation in the matter and is apportioned no part of the fee therefrom; and
      2. written notice is promptly given to the prospective client.
Corporate Client
  1. A lawyer employed or retained by an organization represents the organization acting through its duly authorized constituents.
  2. If a lawyer for an organization knows that an officer, employee or other person associated with the organization is engaged in action, intends to act or refuses to act in a matter related to the representation that is a violation of a legal obligation to the organization, or a violation of law that reasonably might be imputed to the organization, and that is likely to result in substantial injury to the organization, then the lawyer shall proceed as is reasonably necessary in the best interest of the organization. Unless the lawyer reasonably believes that it is not necessary in the best interest of the organization to do so, the lawyer shall refer the matter to higher authority in the organization, including, if warranted by the circumstances to the highest authority that can act on behalf of the organization as determined by applicable law.
  3. Except as provided in paragraph (d), if
    1. despite the lawyer's efforts in accordance with paragraph (b) the highest authority that can act on behalf of the organization insists upon or fails to address in a timely and appropriate manner an action, or a refusal to act, that is clearly a violation of law, and
    2. the lawyer reasonably believes that the violation is reasonably certain to result in substantial injury to the organization, then the lawyer may reveal information relating to the representation whether or not Rule 1.6 permits such disclosure, but only if and to the extent the lawyer reasonably believes necessary to prevent substantial injury to the organization.
  4. Paragraph (c) shall not apply with respect to information relating to a lawyer's representation of an organization to investigate an alleged violation of law, or to defend the organization or an officer, employee or other constituent associated with the organization against a claim arising out of an alleged violation of law.
  5. A lawyer who reasonably believes that he or she has been discharged because of the lawyer's actions taken pursuant to paragraphs (b) or (c), or who withdraws under circumstances that require or permit the lawyer to take action under either of those paragraphs, shall proceed as the lawyer reasonably believes necessary to assure that the organization's highest authority is informed of the lawyer's discharge or withdrawal.
  6. In dealing with an organization's directors, officers, employees, members, shareholders or other constituents, a lawyer shall explain the identity of the client when the lawyer knows or reasonably should know that the organization's interests are adverse to those of the constituents with whom the lawyer is dealing.
  7. A lawyer representing an organization may also represent any of its directors, officers, employees, members, shareholders or other constituents, subject to the provisions of Rule 1.7. If the organization's consent to the dual representation is required by Rule 1.7, the consent shall be given by an appropriate official of the organization other than the individual who is to be represented, or by the shareholders.

A majority of courts that have considered the issue have found that subsidiaries and the parent corporation are one for the purpose of conflicts of interest.

Former Client
  1. A lawyer who has formerly represented a client in a matter shall not thereafter represent another person in the same or a substantially related matter in which that person's interests are materially adverse to the interests of the former client unless the former client gives informed consent, confirmed in writing.
  2. A lawyer shall not knowingly represent a person in the same or a substantially related matter in which a firm with which the lawyer formerly was associated had previously represented a client
    1. whose interests are materially adverse to that person; and
    2. about whom the lawyer had acquired information protected by Rules 1.6 and 1.9(c) that is material to the matter; unless the former client gives informed consent, confirmed in writing.
  3. A lawyer who has formerly represented a client in a matter or whose present or former firm has formerly represented a client in a matter shall not thereafter:
    1. use information relating to the representation to the disadvantage of the former client except as these Rules would permit or require with respect to a client, or when the information has become generally known; or
    2. reveal information relating to the representation except as these Rules would permit or require with respect to a client.

The underlying question is whether the lawyer was so involved in the matter that the subsequent representation can be justly regarded as a changing of sides in the matter in question. Rule 1.9 Comment 2.

Based on whether there is a substantial risk that confidential factual information as would normally have been obtained in the prior representation would materially advance the client's position in the subsequent matter. Rule 1.9 Comment 3.

  • A lawyer cannot just not ask important questions to avoid conflicts.

A firm similarly cannot represent a client whose interests are materially adverse to those of a client represented by a former employee if it is a same or substantially related matter as the former if any lawyer remaining in the firm has confidential information material to the matter. Rule 1.10(b)

  • (This seems to be completely covered by Rule 1.9(a).)
Imputed Conflict of Interest

A firm is treated as a single lawyer under Rule 1.10.

Firm
  1. "Firm" or "law firm" denotes a lawyer or lawyers in a law partnership, professional corporation, sole proprietorship or other association authorized to practice law; or lawyers employed in a legal services organization or the legal department of a corporation or other organization.

What constitutes a firm depends on the specific facts. It can exist if they present themselves in a way that suggests that or if they conduct like a firm.

A firm can have several offices in different cities, and they will all be one firm.

A firm can exist for some purposes, like prohibiting representing both sides, but not for other purposes, like attribution of knowledge.

A conflict is not imputed if the lawyer causing the conflict is timely screened and not paid directly therefrom.

Screen

Screening is the isolation of a lawyer from any participation in a matter through the timely imposition of procedures within a firm that are reasonably adequate under the circumstances to protect information that the isolated lawyer is obligated to protect under these Rules or other law. Rule 1.0(k).

Screening is permitted in six situations:

  • When a lawyer has conflict from his association with a prior firm (Rule 1.10(a)(2))
  • When a lawyer has a conflict from a personal interest that does not have a significant risk of materially impacting the other lawyers' representation (Rule 1.10(a)(1))
  • When a former nonlawyer employee has become a lawyer (Rule 1.10, Comment 4)
  • When a government lawyer entered a firm (Rule 1.11)
  • When a lawyer received confidential information from a prospective client who did not become a client (Rule 1.18)
  • When a lawyer is disqualified because he was a judge, law clerk, arbitrator, or something similar. (Rule 1.12)

When a screening begins, a letter must be sent to the former client informing them of the screening procedures and that they have the right to challenge them in court.

A firm can still get a waiver under Rule 1.7.

Government Lawyer
Former Government Lawyer

Former government lawyers are not bound by Rule 1.9(a).

Rule 1.9(c)'s prohibitions against us[ing] information relating to the representation to the disadvantage of the former client or reveal[ing] information relating to the representation except as these Rules would permit or require with respect to a client. Rule 1.11(a)(1).

A former government lawyer also shall not otherwise represent a client in connection with a matter in which the lawyer participated personally and substantially as a public officer or employee, unless the appropriate government agency gives its informed consent, confirmed in writing, to the representation. Rule 1.11(a)(2).

Matter
  1. As used in [Rule 11], the term "matter" includes:
    1. any judicial or other proceeding, application, request for a ruling or other determination, contract, claim, controversy, investigation, charge, accusation, arrest or other particular matter involving a specific party or parties, and
    2. any other matter covered by the conflict of interest rules of the appropriate government agency.

A former government lawyer who gained confidential government information about a person at such time may not represent a private client whose interests are adverse to that person in a matter in which the information could be used to the material disadvantage of that person. Rule 1.11(c).

Confidential Government Information

Confidential government information is information that has been obtained under governmental authority and which, at the time this Rule is applied, the government is prohibited by law from disclosing to the public or has a legal privilege not to disclose and which is not otherwise available to the public. Rule 1.11(c).

Former government lawyers running afoul of Rule 1.11 can still be screened. Rule 1.11(b).

  1. [A current government lawyer] shall not:
    1. participate in a matter in which the lawyer participated personally and substantially while in private practice or nongovernmental employment, unless the appropriate government agency gives its informed consent, confirmed in writing; or
    2. negotiate for private employment with any person who is involved as a party or as lawyer for a party in a matter in which the lawyer is participating personally and substantially, except that a lawyer serving as a law clerk to a judge, other adjudicative officer or arbitrator may negotiate for private employment as permitted by Rule 1.12(b) and subject to the conditions stated in Rule 1.12(b).