Byte of Prevention Blog

by Jay Reeves |

14 Tips for Avoiding Conflicts of Interest

Does your system for checking for client conflicts of interest need a tuneup?

If you’re only screening for conflicts when you accept a new matter – and not doing it as the case proceeds, especially as new parties get involved – the answer is yes.

And if you’re relying on your memory alone to determine if a conflict exists, the answer is definitely YES!

“A good conflicts checking system is essential,” says Lawyers Mutual. “A poor conflict system is as bad as having no conflict system at all.”

If there’s one thing every client understands – and expects – it’s loyalty. They want to know their lawyer is putting their interests first. If that doesn’t happen, be prepared for negative consequences such as:

  • Disqualification motions and orders
  • Bar disciplinary actions
  • Reversal of proceedings
  • Forfeiture of fees and time invested in the case
  • Malpractice claims

And when conflict claims arise, they tend to be whoppers. Especially in today’s world, where transactions happen at light speed and lawyers are often in the vortex of a whirlwind of multiple parties, conflicting interests and mounting risk.

Help From Lawyers Mutual

The good news is that technology makes it easier than ever to check for conflicts. There are lots of software options on the market, many of which are included in case management suites.

Or you can design your own system. The basic ingredients are (1) a database of clients and adverse parties, (2) a screening form or search request, and (3) a process for circulating the form among attorneys and legal assistants.

There is no magic to it. If you’re looking for practical tips and go-by forms, download this free Lawyers Mutual Conflicts of Interest Practice Guide.

14 Tips for Avoiding Conflicts

  1. Know the ethics rules. Review NC State Bar Rules 1.7 through 1.18. Discuss pertinent ethics opinions at your next staff meeting.
  2. Make sure everyone buys in. Every member of the team should appreciate the necessity of screening for clients and the potential risks of not doing so. Everyone should be trained on the system, have easy access, and use it faithfully.
  3. Screen at three key stages. Before face-to-face consultations, before a new file is opened, and when a new party (and sometimes even new issues, claims or evidence) enters the case.
  4. Check for conflicts with new hires. New attorneys and staff members might bring conflicts with them.
  5. Check various spellings. Don’t overlook prior business names, trade names, and associated names.
  6. Enter all parties connected to a case into the system. The entry should show the party’s relationship to the client.
  7. Document the file. Documentation should show that a search was performed and no impediment to representation was found.
  8. Circulate a new client list. Do this at least weekly. Have all lawyers and staff review the list and report back on any potential conflicts.
  9. Keep your radar on as the case progresses. Some conflicts appear over time. Others may arise after the matter is concluded.
  10. Take action at the slightest hint of a conflict. Talk to your client. Discuss the situation with a senior partner. Don’t just keep silent and look the other way.
  11. Be transparent. Full disclosure and client consent might defuse a sticky situation and prevent a costly malpractice claim.
  12. Beware doing business with your clients. The perception – if not the reality – is that the client is at a disadvantage. Wearing two hats is usually one hat too many.
  13. Avoid representing all the parties in a transaction. The “I was only the scrivener” defense rarely works. Both sides may sue you for malpractice.
  14. Avoid representing multiple defendants. Who is the client? Is it the board, the president, the shareholders, or a partner? Clarify the scope and terms of your engagement in writing.

 

A final pointer: call Lawyers Mutual if you’re unsure a conflict exists and don’t know what if anything you should do about it. Let an expert guide you in the right direction.

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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