Byte of Prevention Blog

by Jay Reeves |

Can You Pass This Conflict of Interest Quiz?

Few qualities are more highly valued by clients than undivided loyalty.

They want to know their lawyer is on their side and fighting for them – and them alone. They don’t want outside interests, including the lawyer’s own interests, to get in the way.

People can sense if you’re on their side. Children are really good at it. They can tell if you’re holding back, or pretending, or if your allegiance is split.

When we are careful to avoid even the appearance of a conflict of interest, we are rewarded with happy clients who bring repeat business and are more forgiving when cases don’t work out perfectly. We also stay out of trouble with the State Bar and our malpractice carrier.

Take our Conflict of Interest Test

How knowledgeable are you on conflicts of interest? Take this test on Rule 1.8 and find out. Answer each question true or false (correct answers below):

1. A lawyer shall not enter into a business transaction with a client or knowingly acquire an ownership, possessory, security or other pecuniary interest directly adverse to a client unless the client is (a) advised in writing of the desirability of seeking the advice of independent legal counsel and (b) given a reasonable opportunity to do so.

2. A lawyer shall not enter into a business transaction as described above unless the client gives informed consent, in a writing signed by the client, to the essential terms of the transaction and the lawyer’s role in it.

3. It’s okay to offer a prospective client a computer tablet in a direct mail solicitation letter as long as you keep records of the solicitation letters you send.

4. While representation of a client is ongoing, a lawyer is allowed to negotiate an agreement giving the lawyer literary or media rights to a portrayal or account based in substantial part on information relating to the representation.

5. A lawyer shall not accept a fee from anyone other than the client unless: (a) the client consents, (b) there is no interference with the lawyer’s independence of professional judgment or with the client-lawyer relationship; and (c) information relating to representation of a client is kept confidential under Rule 1.6.

6. A lawyer who represents two or more clients shall not make an aggregate settlement of the claims of or against the clients, or in a criminal case an aggregated agreement as to guilty or nolo contendere pleas, unless each client gives informed consent, in a writing signed by the client. The lawyer’s disclosure shall include the existence and nature of the claims or pleas involved and the participation of each person in the settlement.

7. It’s okay to foreclose on a client’s deed of trust while you are representing the client.

8. A lawyer shall not make an agreement prospectively limiting malpractice liability unless the client is independently represented in making the agreement, or settle a malpractice claim with an unrepresented client or former client unless that person is advised in writing of the desirability of independent legal counsel.

9. You can recommend that your client purchase a financial product, but you can receive no more than a 10 percent commission on the sale.

Answers

1. True. See Rule 1.8 (a)

2. True. See Rule 1.8 (a) 3. False. See 2015 Formal Ethics Opinion 3

4. False. See Rule 1.8(d)

5. True. See Rule 1.8(f)

6. True. See Rule 1.8

7. False. See 2008 Formal Ethics Opinion 12

8. True. See Rule 1.8(h)

9. False. See 2001 Formal Ethics Opinion 9

So how did you do? Should your malpractice insurer be notified?

Source: NC Rules of Professional Conduct, Rule 1.8 https://www.ncbar.gov/for-lawyers/ethics/rules-of-professional-conduct/rule-18-conflict-of-interest-current-clients-specific-rules/

About the Author

Jay Reeves

jay.reeves@ymail.com | 919-619-2441

Jay Reeves practiced law in North Carolina and South Carolina. Over the course of his 35-year career he was a solo practitioner, corporate lawyer, legal editor, Legal Aid staff attorney and insurance risk manager. Today he helps lawyers and firms put more mojo in their practice through marketing, work-life balance and reclaiming passion for what they do. He is available for consultations, retreats and presentations.

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