October 18, 2011 Articles

Loyalty under Attack: The Pernicious Prospective Waiver

Any prospective waiver should be subject to challenge by the affected client if the client can make a reasonable argument that the client's consent now turns out to be uninformed.

By Lawrence J. Fox

Sometimes when we talk lawyer ethics, we immediately turn to the black letter of the rules, the text of the comments, and the wise counsel of bar opinions, then assume our best litigator posture to justify the conduct at issue. In that process, we often lose our focus on the values that lie behind the rules. Yet, it is those values, more than any comment, that should inform our professional conduct.

For this reason, any discussion of prospective waivers of conflicts of interest must start and end by never losing sight of the fact that what we are addressing is the fiduciary obligation of lawyers to be loyal to our clients; this bedrock commitment separates lawyers from investment bankers, insurance agents, or stockbrokers. As professionals, we are not only obliged, but should also be proud, to put the interests of our clients ahead of our own.

To reflect this fiduciary duty, our profession has adopted a fundamental rule. It provides that we shall not take a position directly adverse to a client. Period. No ifs, ands, or buts. There is no “you can take a position adverse in a transaction.” There is no “you can take a position directly adverse in an unrelated matter.” There is no “it’s OK for your law firm colleague to take a position directly adverse to your client.”

We could have drafted a loyalty rule that included any or all of those exceptions. But we did not. And that was clearly the right decision. Our willingness to embrace an expansive loyalty rule—with full imputation to all lawyers employed in the same practice setting—is designed to ensure that no client has cause to worry whether the lawyer will give less than full dedication to the client’s matter.

The corollary to this broad mandate of loyalty is a rule that permits a client to waive a conflict under certain conditions. But in creating this escape valve from the basic rule of loyalty, the profession again has proceeded with care, structuring the waiver process to protect the client.

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