PART IV Chapter 15: Conflicts of Interest Introduction and Concurrent Conflicts I. Introduction to Conflicts of Interest A.

. Why do conflicts of interest matter? 1. Law firm management: Firms processes for managing conflicts are important to lawyers and to clients 2. Law firm finance: partner compensation is often determined by the billings attributable to partners own clients, which provides incentive to push the boundaries of conflicts 3. Strategic use of disqualification motions based on conflicts 4. Public interest organizations conflicts questions between lawyer and client, when the clients short-term interest or even long-term philosophy may diverge from the lawyers vision of what is most likely to achieve the social change they seek. 5. Government lawyers: the government is not monolithic in its interests and, even if it were, the revolving door would create conflicts issues 6. Law students: employment in one summer can create conflict in later employment. Should law students be treated like lawyers for purposes of successive conflicts rules, or should they be treated like secretaries and paralegals, whose job mobility does not create conflict? B. What is a conflict of interest? What values are served by prohibiting concurrent and successive conflicts? C. What are the types of conflict of interest? 1. Concurrent representation [MR 1.7, chapter 15] 2. Conflicts between a client and the stakeholders of the client [MR 1.13, chapter 13; MR 1.7, chapter 15] 3. Successive representation [MR 1.9, chapter 16] 4. Conflict between attorneys interests and clients interests [MR 1.8, chapter 11] a) E.g., sexual relationship between attorney and client, or investing in clients business D. How is the regulation of conflicts enforced?

1. Voluntary compliance internal to institution (self-regulation): conflicts checks 2. Attorney may be disqualified by a tribunal upon motion of opposing counsel; court orders lawyer to withdraw and client to retain new counsel 3. Attorney may be disciplined by state bar 4. Civil action by client against attorney for malpractice or breach of fiduciary duty 5. If conflict occurs in criminal case and violates 6th Amendments guarantee of effective assistance of counsel, conviction may be overturned 6. Criminal prosecution of attorney II. Concurrent Representation A. General Principle and Rule 1. Attorney cannot represent anyone in a matter adverse to a current client, even if it is in an unrelated matter. [MR 1.7(a)] a) Cannot sue a current client, even if the litigation is wholly unrelated b) Cannot represent two parties adverse to one another in the same transaction 2. In re Kalla 3. What justifies this rule? 4. Problem # 15-1 B. Related entities: When is an affiliate a client for conflicts purposes? 1. Model Rule 1.7 comment 34 2. GSI Commerce v. Babycenter 3. What justifies this rule? 4. Problem # 15-2 C. Waiver of conflicts 1. The Rule [MR 1.7(b)]

a) Informed consent in writing; AND b) Attorney must reasonably believe its possible to represent client effectively notwithstanding the conflict; AND c) The conflict must not be nonwaivable: i.e., prohibited by law (1.7(b)(2)) or representing opponents in litigation (1.7(b)(3)). 2. Should all conflicts be waivable? Should any conflicts be waivable? 3. Should advance waivers be enforceable? a) See GSI Commerce v. Babycenter 4. What are the arguments for adopting either laxer or stricter conflicts standards when dealing with large firms and large corporate clients? 5. Problem # 15-3 D. The Hot Potato Rule: prohibits withdrawal for the purpose of representing a new client. E. Concurrent Representation in Criminal Matters 1. What problems might arise when a lawyer represents two defendants charged in the same crime? 2. Should the bar adopt a categorical rule that flatly prohibits concurrent representation in criminal matters? 3. What are the benefits of multiple representation? 4. Should clients be able to weigh the costs and benefits and decide? a) Remember the waiver rule: informed consent AND atty must reasonably believe she can effectively represent both b) Can clients (or atty) know how sharp the conflict may be in advance? 5. When does a conflict of interest constitute ineffective assistance under the Sixth Amendment? a) If defendant does not object to multiple representation, what standard should govern whether it violates the 6th Amendment? b) What are the (dis)advantages of requiring defendant to show the conflict impaired representation?

6. When does concurrent representation violate Model Rules? a) Did concurrent representation in John Edwards matter violate MR 1.7(a)? b) Even if it does, is the representation permissible under MR 1.7(b)? 7. Problem # 15-4 F. Concurrent Representation of Parties to a Transaction 1. What are the costs and benefits of concurrent representation of parties to a transaction? 2. Can or should the same lawyer represent both the buyer and seller in a state that requires lawyers to handle sales of residential real estate? 3. Problem # 15-5 G. Joint Representation of an Entity and Its Employees 1. Recall the Upjohn and Ruehle/Broadcom situations. Why is there a conflict? 2. What are the costs and benefits of allowing concurrent representation? 3. Rule a) MR 1.7(a)(2): Is there a significant risk that representation [of employee, probably] will be materially limited by responsibilities to another client [corp.]? b) Conflict can be waived under MR 1.7(b) (1) Lawyer reasonably believes s/he can competently and diligently represent both (2) Each client gives informed consent (a) Why would an employee waive the conflict? Why would the corporation? c) Also, remember MR 1.13: 1.13(a): lawyer represents the corporation

1.13(f): lawyer must advise the employee that the lawyer represents the corporation when the lawyer knows the corps interests are adverse 4. Problem # 15-6 H. Concurrent Representation in Family Practice 1. Concurrent representation is common in family practice. Why is it advantageous? What are the potential problems? 2. Estate planning a) Is there a conflict? Who is the client if a married or partnered couple seek a lawyers assistance in drafting both their wills? b) Should a lawyer speak to each spouse/partner alone? c) How would the confidentiality rules affect what the lawyer should do? d) How are families different from corporations in this regard? e) Does the problem resolve if you treat the family as the client rather than each individual? 3. Divorce a) Attorney may represent both when (a) its uncontested, (b) attorney has made full disclosure of the conflict and the consequences of joint representation, (c) each spouse consents separately, and (d) lawyer can effectively represent both. b) Some jurisdictions prohibit joint representation. California allows it. c) Can you say here the client is the family? d) Is the client the situation (Brandeis)? 4. Business transactions. In re Botimer a) When did the conflict of interest emerge? b) What is the relationship between conflicts of interest and confidentiality? 5. Problem # 15-7

I. Concurrent Representation of Insurers and Insureds 1. The nominal client is the individual (the insured) but the entity that hires and pays the lawyer, controls the defense, and will pay the judgment, is the insurer. 2. Why is concurrent representation advantageous, and what are its risks, it insurance context? J. Class Actions 1. Why do class actions present a risk of conflicts of interest? 2. What are the arguments for and against rigorous enforcement of conflicts notions in the class action setting? K. Positional Conflicts 1. What is a positional conflict? 2. MR 1.7 Comment 24 3. When is a positional conflict an actual conflict and when is it simply a matter of employment policy between lawyer and client or among lawyers in a law office or law firm? 4. Problem # 15-8