Best Practices for Avoiding Conflict of Interest

Issues related to conflicts of interest can be thorny to address—it is difficult for attorneys to maintain complete and updated records listing the entirety of their personal and professional relationships. However, neglecting or ignoring this critical part of your practice can have negative consequences for law practice and the legal profession.

Every jurisdiction has rules regulating the practice of law and conduct of legal professionals. These rules are written to protect specific parties: for attorneys, it is the client, and for judges, it is the public. When dealing with potential conflicts of interest, always consider the party intended to be protected. This means putting aside your subjective views about whether a conflict exists. Analyze a particular personal or professional relationship from the perspective of a client, or the public.

Questions to Ask

In practice, this means an attorney must always consider the greater consequences of their representation. Who is the client? What kinds of duties arise from my representation of the client? Am I personally interested in the outcome of the matter? Does my representation of one client in a matter affect the interest of any of my other clients?

Attorneys may face a wide array of questions regarding the propriety of their representation if they have not done a preliminary conflicts of interest check. Though many of these questions can be answered through prompt and accurate disclosures, it would be better to avoid any questions.

Discovery and Disclosure

Conflict of interest laws do not require attorneys be entirely disinterested to fairly represent their client. Discovery of a conflict of interest is not disqualifying—it may only require disclosure to remedy. Disclosures should be made as soon as the attorney becomes aware of the potential conflict. The language used in a disclosure should be clear and understandable, and the client should be given the opportunity to ask questions and seek clarification.

The disclosure should include the nature of the conflict, how it may impact the attorney’s representation of the client, and any steps the attorney will take to mitigate the conflict. The attorney should also explain the client’s options, including the option to seek independent legal counsel.

Special issues may arise when attorneys attempt to disclose potential conflicts of interest that implicate confidential client information. This is particularly relevant when disclosing a potential conflict to a client in one matter that involves a different client in a potentially related matter. In that case, measures must be taken first to ensure that the information disclosed violates neither client’s confidentiality.

Attorneys should always document any disclosures in writing, including the date of disclosure, the nature of the conflict, and any actions taken to address the conflict. This documentation can be helpful in the event of any future disputes. It also creates a record of what was disclosed, to whom, and when. Finally, in the case of ongoing disclosures, be sure to review your prior disclosures for consistency.

When Conflicts May Be Waived

After proper disclosures are made, the client is given the opportunity to waive conflicts and agree to continue being represented by you. Unfortunately, disclosure alone is not a panacea to an attorney’s conflict of interest problems. In some cases, a conflict of interest can be so significant that the attorney is unable to represent the client.

The American Bar Association’s Model Rules of Professional Conduct provide guidance on when a conflict of interest cannot be waived.

Rule 1.7(a) states that a conflict of interest is unwaivable if it involves a concurrent conflict of interest, meaning that the attorney’s representation of one client will be directly adverse to another client, or there is 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 personal interest of the lawyer. In such a case, an attorney cannot represent both clients, even if both clients consent.

Rule 1.7(b) details other circumstances where a conflict of interest may be unwaivable, including when the lawyer does not reasonably believe they can provide competent and diligent representation to their clients, and when the representation is prohibited by law.

In such cases, an attorney may not represent a client even with the client’s informed consent.

The situations mentioned above do not encompass all the potentially unwaivable conflicts that could arise in any given case. For instance, your client might lack capacity to provide informed consent, or your state’s rules of professional conduct may have its own standards on unwaivable conflicts. Attorneys or their management team should check with their local professional associations and ethical boards for more specific information and guidance.

Exercising the due diligence required to provide effective disclosures and to properly analyze conflicts of interest can be complicated and time-consuming. However, it is absolutely critical to the integrity of our profession. Avoiding conflicts of interest benefits your client and increases public trust in the law. That trust is the bedrock of our profession, and of civil society as a whole. Accordingly, an attorney should do everything possible to avoid conflicts of interest and respond fully to any questions about alleged conflicts.

This article does not necessarily reflect the opinion of Bloomberg Industry Group, Inc., the publisher of Bloomberg Law and Bloomberg Tax, or its owners.

Author Information

Tianqi Sun is a litigation associate at McManis Faulkner.

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