Waiving conflicts of interest.

• Author: Zacharias, Fred C.
• Position: Lawyers concurrently representing multiple clients - California

This Essay explores the issue of when multiple clients may consent to concurrent representation by a single lawyer.(1) Most American jurisdictions evaluate client consent according to rules formulated by the American Bar Association.(2) The rules allow clients to waive their lawyers' conflicts of interest but impose significant limitations on that right.(3) This Essay concludes that the prevailing consent model is fundamentally flawed.(4)

In order to highlight problems with the ABA approach, this Essay focuses on the primary alternative: California Rule of Professional Conduct 3-310.(5) Like other American jurisdictions, California forbids lawyers to represent clients whose interests conflict, or potentially conflict, with the interests of another current client, a former client, or the lawyer(6) herself.(7) But unlike the other states, California's conflicts provision gives potentially prejudiced clients an absolute right to waive a conflict.(8) The viability of this provision has been questioned even in California. At least one appellate court has suggested that, despite the Code's absolute language, some conflicts of interests are nonwaivable.(9)

California's rule and the judicial response raise important questions about the proper role of consent in conflict-of-interest situations. Consider this example:

Two criminal codefendants, one an alleged drug kingpin and the other a lieutenant in his organization, retain the organization's regular lawyer to represent them. They consent to joint representation after being informed of the potential for conflicting interests.(10) Or, consider this common illustration from a transactional setting:

A commercial real estate developer agrees to buy a parcel of land The developer retains an attorney to represent it and the seller of the property. Both clients are informed of the potential conflict of interest. The seller agrees to the multiple representation because the transaction seems straightforward and the developer has agreed to pay the cost of the representation.(11) Should such clients be able to waive lawyer conflicts? When, if ever, should the clients' waivers be overridden? Why, for example, do the California courts foresee a need to find exceptions to California's unambiguous waiver rule?

The following pages analyze these issues. Part I contrasts the conflicts provisions in the California Code with those in the ABA Model Rules. Part II considers the masons why regulators sometimes allow clients to waive the regulatory protections. Part III identifies the reasons why courts typically reserve the power to void client consent if the regulators have not done so.

The Essay then attempts to draw from California's experience. Part IV describes and evaluates the judicial effort to modify California's absolute waiver provision. Part V concludes that California's conflict-of-interest rule focuses insufficiently on the contradictory purposes that conflict regulation serves. The analysis, however, suggests that the ABA alternatives are equally flawed. Part VI therefore offers a new codification of principles regarding waiver of conflicts among concurrent clients that would accomplish the goals of conflicts-of-interest regulation more effectively.

1. THE CONFLICT-OF-INTEREST RULES

   The Model Rules contain two rules governing conflicts of interest among current clients. Model Rule 1.7(a) provides in pertinent part:

   A lawyer shall not represent a client if the representation of that client will be directly adverse to another client....(12) Model Rule 1.7(b) provides:

   A lawyer shall not represent a client if the representation of that client may be materially limited by the lawyer's responsibilities to another client....(13) The California Rules of Professional Conduct, though worded differently, contain similar proscriptions against conflicted representation:

   A member shall not... (1) Accept representation of more than one client in a matter in which the interests of the clients potentially conflict; or (2) Accept or continue representation of more than one client in a matter in which the interests of the clients actually conflict; or (3) Represent a client in a matter and at the same time in a separate matter accept as a client a person or entity whose interest in the first matter is adverse to the client in the first matter.(14) Both the Model Rules and the California conflict-of-interest rules allow current clients to waive their objections to the conflicting representation. The ABA formulation is, however, more guarded in its attitude toward consent.(15)The two ABA provisions limit the client's ability to authorize the representation when the lawyer concludes that the consent is tactically unwise.

   Under Model Rule 1.7(a), the lawyer may not accept a client's consent if she believes, or should believe, that the representation will "adversely affect [her] relationship with the other client."(16) Similarly, under Model Rule 1.7(b), the lawyer may not accept a client's waiver if she believes that the representation will be "adversely affected."(17)

   In contrast, the California code exhibits no hesitation about allowing concurrent clients to waive conflicts. The prohibition against the representation itself contains the caveat that the prohibition applies only when the lawyer acts "without the informed written consent of each client."(18)

   At least one jurisdiction, Oregon, takes a third, slightly different, approach to the issue of consent.(19) The Oregon Code of Professional Responsibility follows the Model Rules but amends them to distinguishbetween waivable and nonwaivable conflicts.(20) When an actual conflict exists--"when the lawyer has a duty to contend for something on behalf of one client that the lawyer has a duty to oppose on behalf of another client"(21)--she may not accept a client's consent.(22) In contrast, when a conflict of interest is only potential, or "likely,"(23) consent is permissible.(24)

2. REASONS FOR ALLOWING CLIENT WAIVER OF CONFLICT-OF-INTEREST PROTECTIONS

   Most justifications for client consent provisions are premised on the view that honoring consent exhibits concern for client autonomy.(25) Identifying the meaning of autonomy in this context is not simple.(26) To the extent that autonomy simply refers to a client's right to make choices, it is tautological to say that honoring consent enhances autonomy. Yet clearly autonomy does not mean that a client can or should be able to do whatever he wishes. A client may not bribe a juror, choose to commit perjury, or insist that his lawyer commit malpractice. The conceptualization of autonomy as client freedom therefore does little to advance the determination of which client choices should be honored.

   Confusion over the meaning of autonomy appears most starkly in the comments to Section 202 of the recently adopted Restatement (Third) of the Law Governing Lawyers:(27)

   Concern for client autonomy generally warrants respecting a client's informed consent. In some situations, however, joint representation would be objectively inadequate despite a client's voluntary and informed consent.(28) The relationship between the objective adequacy of the representation and the client's autonomy is not obvious. The freedom to choose presumably encompasses the right to choose unwisely.(29) If the adequacy of the representation is to be considered in deciding whether honoring client choice enhances autonomy, then the Restatement drafters must be saying that the autonomy in question is a "good thing" only if it benefits, or might benefit, the client.(30) This version (or vision) of autonomy justifies consent only when the client has a valid instrumental reason for exercising a questionable choice.

   The California conflict rules seem to express a preference for the tautological view of autonomy. The exercise of choice itself is a benefit that justifies honoring consent.(31) California's professional regulators have acted on a similar preference in adopting an absolute attorney-client confidentiality provision: Lawyers may not use confidential information to frustrate a client's exercise of autonomy, even if withholding such information may jeopardize the life of a third party.(32) Thus, it is easy to imagine that the California Code's drafters have relied upon pure autonomy notions in giving clients an absolute right to waive conflicts of interest, regardless of the consequences to themselves.

   Alternatively, the California consent provisions may simply mask confusion over how far the right to autonomy should extend. The ABA codes and the Restatement certainly suggest that, in order to be honored, the exercise of the consent power must be reasonable. Yet, on the surface, it seems inherently unreasonable for a client to accept a lawyer who may exercise less than independent judgment on the client's behalf.(33) To proffer qualifying acts of autonomy, one must be able to identify situations in which rational clients are justified in choosing imperfect representation.(34)

   The most obvious justification is cost.(35) Using a single lawyer jointly can save clients the expense of duplicative representation.(36) Even when clients are antagonists, the potential benefits that an aggressive, unconflicted lawyer might achieve on behalf of a client may be less than the expense of the additional representation. Thus, for example, both parties to a divorce proceeding may prefer to divide their community resources using the advice of a single lawyer even though the advice may serve one client better than the other.(37)

   A client might also wish to retain a lawyer who has conflicting responsibilities because that lawyer has the best qualifications for the job.(38) Suppose, for example, that a criminal defendant's alibi witness has personal reasons for not wanting to appear at the defendant's trial. The witness's lawyer is known to be the best defense lawyer in town. That lawyer is willing to represent the defendant, but only on...