May 20, 2014 Articles

Risky Business: Identifying, Preventing, and Managing Conflicts of Interest

By Merri A. Baldwin

Contemporary law practice requires sophisticated management of conflicts of interest, including the detection of potential conflicts, the prevention of actual conflicts through advance waivers or active practice management, and, increasingly, the litigation of motions to disqualify, especially in high-stakes cases. The reasons for the increasing prominence of conflicts are many: lawyer mobility among law firms; law firm mergers; increased specialization of lawyers’ practices, with an ever-smaller client pool; and the tendency of large corporations to spread out their work among multiple law firms, rather than concentrate their legal work in one national firm. The larger the law firm, the greater the likelihood that conflicts will arise. The risks of failing to manage conflicts effectively can be significant: disqualification, fee disgorgement, civil liability for breach of fiduciary duty, and discipline by state bars, courts, and government agencies.

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