Samuel C. Stretton.

Every lawyer should be careful to avoid conflicts as much as they can.

I am a young lawyer. What are some of the conflicts of interest that should be avoided under any circumstances?

Of course, there are always conflicts and one has to be careful and learn to recognize a conflict. A list of conflicts which ought to be avoided are set forth below. It's surprising how many lawyers fall within these conflicts.

The first is in a criminal case in representing multiple defendants. It's almost impossible to represent multiple defendants anymore. Back 40 or 50 years ago, it was more the norm, but not now. Defendants may have conflicting defenses or it may be in the interest of one to work a guilty plea and the other to go to trial with the first testifying. This potential conflict could create an actual conflict down the line. If a lawyer represented both defendants initially, they will most likely not be able to represent anyone afterwards. The reason is the confidential information that's been provided would prevent further representation under Rule 1.7 of the Rules of Professional Conduct.

Another conflict that used to be seen, but occurs very infrequently now, is when in a domestic case the lawyer ends up representing the husband, but advising the wife, but contending he or she was the scrivener. The scenario is that the husband and wife meet with the lawyer and state they have reached an agreement. The lawyer represents one of them, either the husband or the wife, and the other is unrepresented. There is no such thing as a scrivener anymore. That was a term that might have worked 30 or 40 years ago, but doesn't exist now. A lawyer cannot represent both parties. Rules 4.3 and 4.4 in dealing with advice to an unrepresented party and not taking advantage of an unrepresented party would clearly apply and prevent any scrivener. Under the circumstances, the lawyer should send the unrepresented party a letter telling them to get independent counsel, etc. Only if they want to waive it in writing should the lawyer even consider continuing.

Another classic example is representing the driver and passengers in motor vehicle accidents. In Pennsylvania, it's okay to start out that way, but the problem becomes when the drive is joined as an additional defendant, which often is the case. That could well create a conflict of interest, which might cause the lawyer to not be able to represent either the driver or passenger under Rule 1.7 of the Rules of Professional Conduct, the General Conflict Rule.

Another conflict that can create confusion is in small businesses where the lawyer is the general counsel, but at the same time advising and representing the various shareholders or partners. If there is some kind of business breakup, the lawyer sometimes represents one or more of the partners against the others. That cannot occur, particularly if the lawyer has represented all of them in their private matters. When representing a business, the lawyer must make it very clear who he represents. Partners or shareholders might not understand that the lawyer represents the business and not them individually. The problem becomes compounded when the lawyer is giving them personal advice on domestic issues, their son's arrest, etc.

Another conflict is a lawyer serving on the board of directors of a corporation and at the same time representing the corporation. That occurs even now. Although there is no direct prohibition, the better practice is not to do both. If the lawyer is general or assistant counsel for a corporation, then do that. But, don't play both roles since conflicts can occur (See Rules 1.7 and 1.13 of the Rules of Professional Conduct).

Another conflict that arises is borrowing money or doing business with a client. The best answer is to never do any business with one's client or borrow money from a client. It's just not a good thing because it creates a conflict. It creates too many problems and often backfires on the lawyer. But, if a lawyer is going to have any business dealings with a client, then the lawyer has to comply with Rule of Professional Conduct 1.8(a). That's almost like the written Miranda Rules in criminal law. The lawyer has to advise the client to see independent counsel and receive a written waiver from the client if the client does not want to. The Rules of Professional Conduct do not want a lawyer to be representing a client and then doing business with them at the same time. If a client seeks independent legal advice and still wants to do business, that is acceptable. But, every lawyer should be very, very careful. Doing business with a client also includes borrowing money from a client, minor business deals, etc.

Another potentially worrisome conflict is a person who consults briefly with an attorney and never retains them and then sometime later hires another attorney. The person then begins litigation and the person they sue comes to the first attorney. This perspective client who does not refrain can always create problems. Sometimes clients will do that to disqualify another lawyer. Rule of Professional Conduct 1.18, titled “Duties to Prospective Clients,” should be carefully reviewed. Every lawyer should make a record of who they speak to even if it's only briefly and perhaps note what was said or not said. One of the key concerns of the rule is whether damaging confidential information has been given.

Bringing a suit against a former client is usually one that should be avoided. Rule 1.9 of the Rules of Professional Conduct deals with situations involving a former client. If the lawsuit is substantially related to the case where the lawyer represented the former client, then the lawyer can't. Another major issue is whether there was confidential information that could be used adversely. The better practice is not to. Rule 1.9 of the Rules of Professional Conduct controls conflicts involving former clients.

Government lawyers who leave the government and go with a private law firm can face similar issues. Rule 1.10 involves private firms and imputed conflicts. Rule 1.11 involves conflicts with government agencies. Sometimes these conflicts can be overcome by a screening process, but it has to be done immediately, there can be no sharing of fees, and the other side has to be immediately notified. Failure to do that can result in disqualification of the new firm in litigation.

Immigration law also can create issues of conflict of interest. It's particularly important for lawyers who represent employers and then represent clients who need employment to recognize a potential conflict situation can arise under certain circumstances.

Another conflict that can arise is arguing both sides of the same issue. A lawyer cannot be arguing strenuously for one side of a particular issue involving one client and then the next day go into court with another client and argue the exact opposition position. Rule 1.7 of the Rules of Professional Conduct would prevent that conflicting role. The comments to the Rules cover this situation. Even though the clients are separate and apart, it clearly hurts a client if the lawyer has argued strongly that the court should decide one way in one courtroom and the next day argue the exact opposite position before the same judge or even another courtroom. It's not permitted under Rule 1.7.

There are many, many more conflicts of interest potentials. Any lawyer practicing must make themselves very familiar with the conflict of interest rules, which are the General Conflict Rule 1.7 of the Rules of Professional Conduct, the Specialized Conflict Rule 1.8, and the prior Client Conflict Rule 1.9 of the Rules of Professional Conduct.

The bottom line is if there are any issues that would cause a lawyer from giving less than 100 percent of their effort to a client, then the lawyer shouldn't take the case because there is a conflict. Whether the conflict is because the lawyer has an issue for him or herself that might be affected by the case or might affect another client's business or there is some other interest that pulls at the lawyer, then the lawyer should not take the case. A classic example is if a lawyer needs money desperately and obtains an initial settlement offer of say $50,000 or $100,000 where the lawyer would get a one-third fee. If the case was worth much more, but the lawyer pushes the client to settle so the lawyer can get paid, that is a classic example of a lawyer putting his interest ahead of the client.

Conflicts of interest can be devastating in terms of hurting the client and also for undermining the integrity of the legal profession. Every lawyer should be careful to avoid conflicts as much as they can. Clearly, every lawyer wants to make a living and at times it's hard to turn away cases, but there has to be a hard and cold conflict review. The lawyer has to have the integrity to refuse a case if the lawyer is conflicted out without trying to muddle through.

You can sue an an affiliate organization, but make sure to follow the rules.

If I represent a corporation, can I bring a separate suit against an affiliate organization or a parent or subsidiary corporation without violating conflict of interest rules?

The answer is that it's very possible a lawyer can bring such a suit. This again involves Rule 1.7, the General Conflict of Interest Rule, but also involves looking at Rule 1.13 in terms of who one represents when they represent a corporation Rule 1.13 of the Rules of Professional Conduct notes a lawyer retained by an organization to represent the organization is acting through its authorized constituents. Those are the officers of the corporation normally. The lawyer does not represent them individually. Comment 2 to the rule notes there is attorney-client privilege when communicating with, for instance, the board of directors member or the president of the corporation if it involves corporate business. Comment 2 clearly notes that the constituents of an organizational client such as a corporation are not the clients of the lawyer unless the lawyer indicates they are.

In the General Conflict of Interest Rule 1.7 under Comment 34, the following is noted: “A lawyer who represents a corporation or other organization does not, by virtue of that representation, necessarily represent any constituent or affiliated organization, such as a parent or subsidiary (see Rule 1.13a). Thus, the lawyer for an organization is not barred from accepting representation adverse to an affiliate in an unrelated matter, unless the circumstances are such that the affiliate should also be considered a client of the lawyer, there is an understanding between the lawyer and the organization client that the lawyer shall avoid representation adverse to the client's affiliates or the lawyer's obligation to either the organization client or the new client is likely to limit materially the lawyer's representation of the other client.”

Therefore, to answer the question based on Comment 34, one can do so as long as those conditions set forth in the comment are resolved.

From a practical standpoint it may not be a wise idea to represent the subsidiary. When one is representing a corporation, this would not normally endear one to the corporate board of directors to be suing an affiliate or a subsidiary. Therefore, if the lawyer likes representing the client and it is a lucrative legal fee, one might reconsider before suing a subsidiary or corporation. But, under the circumstances, it can be done, but the conditions in Comment 34 should be noted and met.

Chester County lawyer Samuel C. Stretton has practiced in the area of legal and judicial ethics for more than 35 years. He welcomes questions and comments from readers. If you have a question, call Stretton directly at 610-696-4243 or write to him at 301 S. High St. P.O. Box 3231, West Chester, Pennsylvania, 19381.