Handling Conflicts of Interest
Having attended law school, lawyers are aware of the concept of conflicts of interest. The ABA's MRPC 1.7 through 1.11 codify a lawyer's responsibility to avoid such conflicts. Even the appearance of a conflict of interest can be damaging. But what is involved in implementing a system for avoiding conflicts of interest?
- An attitude. Simply being alert to possible conflicts will help form good habits and lead to asking better questions of prospective clients.
- Standards. Firms can benefit from articulated (and understood!) standards relating to providing legal services and having business interests in the business affairs of clients.
- Scrutiny. Each possible new client and matter must undergo a review of the parties involved.
- A System. Use a database of “your world.” That means include all clients, parties, vendors, employees, prospects . . . you name it. Each listing must have a description of who the party is and what relationship or file he or she or it (entity) has to you or to your firm. The conflicts system also includes your memory. Larger firms circulate lists of new matters for the lawyers to review and sign off on.
- Follow Up. Apparent conflicts are subject to review and decision. Have a written policy about how this review and decision are handled and documented. A waivable conflict of interest should be supported by sufficient evidence from the database and the file. A nonwaivable conflict becomes an opportunity to refer the person to one or more other lawyers, thereby building your referral network. Either decision is reduced to writing for possible later retrieval.
This practice tip is a service of the Practice Management Advisors Committee of the ABA Law Practice Management Section. For additional information about PMA services in your area, contact your state's practice management advisor.