Friends and Lovers: Conflicts of Interest and New Aba Opinion on Relationships Between Opposing Counsel
| Citation | Vol. 90 No. 1 Pg. 30 |
| Pages | 30 |
| Publication year | 2021 |
January, 2021.
J. Nick Badgerow
I. INTRODUCTION AND OVERVIEW
As Society evolves (or devolves), relationships among people change. Lawyers are not immune from these changes. Thus, it is important continually to examine and evaluate the relationship which lawyers maintain between and among themselves, particularly as they relate to potential conflicts of interest with opposing counsel, in order best to protect clients’ interests. The paradox is that the closer one’s relationship to the lawyer on the other side, the more likely there is to be a conflict of interest which will affect the clients of both lawyers.
A recent opinion from the American Bar Association, Formal Opinion 494 (“Opinion”),[1] addresses these issues. While providing little in the way of hard and fast rules, the Opinion raises questions and suggests remedies to be considered and applied when a lawyer finds himself/herself opposed by counsel on the other side with whom the lawyer has an intimate, close, or even passing relationship. The Opinion also provides the opportunity to review the basic rules and processes for considering and addressing concurrent conflicts of interest under the Kansas Rules of Professional Conduct (“KRPC”).[2]
II. CONCURRENT CONFLICTS OF INTEREST AND WAIVER
A. Basic Principles
Te principles governing conflicts of interest with a current client are found in Rule 1.7(a), which provides as follows:
(a) Except as provided in paragraph (b), a lawyer shall not represent a client if the representation involves a concurrent conflict of interest. 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 substantial 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.[3] To summarize, one may not take on the representation of one current client if that representation is directly adverse to another current client, or where the representation will be materially limited by the lawyer’s responsibilities to another client, a former client, a third person, or the lawyer’s own interest. The Rule goes on to provide a limited exception, containing several specific exceptions:
(b) Notwithstanding the existence of a concurrent conflict of interest under paragraph (a), a lawyer may represent a client if each affected client gives informed consent, confirmed in writing, and:
(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; and
(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.[4]
Thus, in order for there to be an effective waiver, the following conditions must be must:
1. The proposed representation obviously does not involve assertion of a claim by the lawyer in the same litigation or proceeding in which the lawyer is representing the other client;
2. The lawyer has the actual belief that s/he will be able to provide competent and diligent representation to both clients; and
3. The lawyer had the reasonable belief that s/he will be able to provide competent and diligent representation to both clients; and
4. Each client gives informed consent; and
5. That informed consent is confirmed in writing.
Thus, absent a determination by the lawyer that the conflict is consentable and the grant of consent by the client, a lawyer may not act as an advocate in one matter against a person the lawyer represents in some other matter, even when the matters are wholly unrelated. The client as to whom the representation is directly adverse is likely to feel betrayed, and the resulting damage to the client-lawyer relationship is likely to impair the lawyer’s ability to represent the client effectively. In addition, the client on whose behalf the adverse representation is undertaken reasonably may fear that the lawyer will pursue that client’s case less effectively out of deference to the other client, i.e., that the representation may be materially limited by the lawyer’s interest in retaining the current client.[5]
What follows is an analysis of the steps which a lawyer must follow in order to analyze a conflict, determine whether it may be waived, and then the steps necessary to obtain a proper waiver.
B. Are They Both Clients?
Te first consideration is whether the proposed representation of the proposed client will be directly adverse to another client. The rule precludes direct adversity to another “client.” The attorney-client relationship is
not dependent upon the payment of a fee, nor is a formal contract necessary to create the relationship. The contract may be implied from conduct of the parties. The employment is sufficiently established when it is shown that the advice and assistance of the client are sought and received in matters pertinent to his profession.[6]
C. Is the Representation Directly Adverse?
Once it is determined that both parties are “clients,” the next test is to determine whether the proposed representation is “directly adverse” to another client, or can reasonably be foreseen to become directly adverse. In some contexts, this is clear. For example, a lawsuit against a current client is “directly adverse,” as would be the conduct of negotiations for one client to purchase the assets or business of another client. Representation of one spouse on a motion to increase child support in a divorce action where the lawyer represented the other spouse in the divorce would be directly adverse.
The justification for the rule is that the lawyer needs to give advice, to negotiate, and to advocate, for the benefit of one client, not splitting his/her loyalties – in fact or in the client’s eyes. The lawyer’s thoughts and efforts, and the transaction itself, need to be free from being clouded by the interests of another client. They need to proceed without the lawyer confronting a mental conflict of deciding whose interests to advocate, and without the specter of doubt on the part of either client as those whose interests are actually being served.
Thus, absent a determination by the lawyer that the conflict is consentable and the grant of informed consent by the client, a lawyer may not act as an advocate in one matter against a person the lawyer represents in some other matter, even when the matters are wholly unrelated. The client as to whom the representation is directly adverse is likely to feel betrayed, and the resulting damage to the client-lawyer relationship is likely to impair the lawyer’s ability to represent the client effectively. In addition, the client on whose behalf the adverse representation is undertaken reasonably may fear that the lawyer will pursue that client’s case less effectively out of deference to the other client, i.e., that the representation may be materially limited by the lawyer’s interest in retaining the current client.
A thoughtful consideration of the issue needs to be made, because it is likely that, if the lawyer decides that the representation is not “directly” adverse and proceeds with the representation without satisfying the other requirements of the Rule, the other client could make a sufficient objection, or take the other sufficient action, so as to require the lawyer to justify any failure to follow the Rule.
D. Does the Lawyer Actually and Reasonably Believe That the Relationship Will Not Be Materially Limited?
If the representation of one client would be directly adverse to another client, then the next step is for the lawyer to examine his relationship with the affected client. Would the relationship be affected by taking a case or matter directly adverse to that client? In order to proceed, the lawyer must have the actual belief that there is not “a substantial risk that the representation of” neither client will be materially limited by taking on the representation.[7]
Even where there is no direct adverseness, a conflict-of-interest exists if there is a...
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