November 01, 2001

Avoiding Conflicts in Estate Planning: An Estate Planning Lawyer’s Perspective (2001, 15:06)

Avoiding Conflicts in Estate Planning: An Estate Planning Lawyer’s Perspective

Probate and Property, November/December 2001, Volume 15, Number 6

By Michael V. Bourland and David P. Dunning
Michael V. Bourland and David P. Dunning are members of Bourland, Wall & Wenzel, P.C., in Fort Worth, Texas.

Connolly Oyler is correct in his article’s conclusion that a lawyer should exercise caution before undertaking a joint representation of multiple clients. But in appropriate circumstances, joint representation can be a very effective, efficient, and professional method of providing legal services—and perhaps even a better method of providing legal services than separate representation for each person.

Connolly Oyler is correct in his article’s conclusion that a lawyer should exercise caution before undertaking a joint representation of multiple clients. But in appropriate circumstances, joint representation can be a very effective, efficient, and professional method of providing legal services—and perhaps even a better method of providing legal services than separate representation for each person.

Connolly Oyler is correct in his article’s conclusion that a lawyer should exercise caution before undertaking a joint representation of multiple clients. But in appropriate circumstances, joint representation can be a very effective, efficient, and professional method of providing legal services—and perhaps even a better method of providing legal services than separate representation for each person.The American Bar Association Model Rules of Professional Conduct (“ABA Model Rules”) and the corresponding state codes of professional responsibility that have adopted the ABA Model Rules recognize the advantages of joint representation and authorize joint representation of clients in estate planning, closely held business planning, and other nonlitigation matters in appropriate circumstances. See Rule 2.2 (Intermediation and Multiple Representation) and Rule 1.7 (Conflict of Interest: General Rule) of the ABA Model Rules and their accompanying comments (noting that proposed revisions to the ABA Model Rules would delete Rule 2.2 in its entirety and incorporate many of its principles and commentary into a revised Rule 1.7).

Specifically, Comment 3 to current Rule 2.2 of the ABA Model Rules states:

A lawyer acts as intermediary in seeking to establish or adjust a relationship between clients on an amicable and mutually advantageous basis; for example, in helping to organize a business in which two or more clients are entrepreneurs, working out the financial reorganization of an enterprise in which two or more clients have an interest, arranging a property distribution in settlement of an estate or mediating a dispute between clients. The lawyer seeks to resolve potentially conflicting interests by developing the parties’ mutual interests. The alternative can be that each party may have to obtain separate representation, with the possibility in some situations of incurring additional cost, complication, or even litigation. Given these and other relevant factors, all the clients may prefer that the lawyer act as intermediary.

Thus the ABA Model Rules recognize that, in certain circumstances, joint representation of multiple clients with potentially conflicting interests is appropriate because the clients’ interests are generally aligned and they are working together to achieve a common goal, such as a coordinated estate plan or a new business, that outweighs the potential conflicting interests.

The Three C’s

Before undertaking a joint representation, a lawyer needs to follow the “Three C’s”—Consideration, Consultation, and Consent. First, the lawyer needs to review the ABA Model Rules or the corresponding state code of professional responsibility and consider whether the contemplated joint representation will satisfy the applicable requirements for a proper joint representation.

Admittedly, the requirements set forth in the ABA Model Rules for joint representation can be confusing and difficult to apply to a particular set of circumstances; accordingly, a lawyer will need to rely upon his or her best judgment and experience as applied to the specific factual circumstances in evaluating whether a contemplated joint representation would be appropriate. Comment 4 of Rule 2.2 of the ABA Model Rules expressly states that a lawyer cannot undertake a joint representation if contentious litigation is imminent or if contentious negotiations are contemplated, and this Comment further discourages a lawyer from undertaking a joint representation if definite antagonism exists.

Second, the lawyer needs to consult with each client about the implications of the joint representation, including the risks and benefits of such joint representation. Among other things, the lawyer needs to explain to each joint client that, in carrying out the joint representation, the lawyer’s role will be different from the traditional role of partisanship. Rather than acting as an advocate on behalf of a particular client, the lawyer will be attempting to develop and promote the interests of all the clients to reach a common goal. In addition, the lawyer needs to advise each client that there are no secrets in connection with the joint representation matter and that client communications will be shared among all of the joint clients. Furthermore, the lawyer needs to advise each joint client that, in the event of litigation between or among the joint clients over the joint representation matter, the attorney-client privilege will probably not apply to any lawyer-client communications concerning that matter and the lawyer will not be able to represent any of the joint clients in that litigation.

Third, the lawyer needs to obtain the consent of each client, preferably in writing, for the lawyer to undertake the joint representation. In his article, Mr. Oyler makes an excellent point that any such written consent should be in a format that is clear and understandable from the client’s point of view. See Sample Consent Letter.

The lawyer’s work does not end with the “Three C’s.” After undertaking the joint representation, the lawyer needs to keep each joint client adequately informed about the status of the joint representation matter, consult with each client on the decisions to be made in connection with that matter, and remain vigilant for any conflicts that may subsequently arise and preclude the continued joint representation.

Conclusion

In appropriate circumstances, joint representation can be a very effective and efficient method of providing legal services to clients. But as Mr. Oyler points out and as noted above, a joint representation should be taken very seriously. By following the “Three C’s” a lawyer can take practical steps to represent joint clients professionally and successfully.

SAMPLE CONSENT LETTER

FIRM LETTERHEAD

Date

Mr. and Mrs. ____________

_______________________

_______________________

Re: Consent to Joint Representation for Estate Planning

Dear Mr. and Mrs. _____________:

We are pleased that you have engaged our firm to represent the two of you in connection with estate planning matters (“Estate Planning”). An attorney has the duty to exercise independent professional judgment on behalf of each client.  If an attorney is requested to represent multiple clients in the same matter, the attorney can do so only if the attorney can impartially fulfill this duty for each client and if the attorney obtains the consent of each client after explaining the possible risks, benefits, and implications involved in the joint representation.

Based upon our initial discussions with the two of you, we have concluded that our firm can impartially represent the two of you in connection with the Estate Planning. Please be aware, however, that each of you may obtain separate, independent counsel on this matter—now or at any time in the future. In determining whether you should consent to this joint representation, you should carefully consider the following:

1. Role as Joint Legal Counsel.

In our joint representation of the two of you on the Estate Planning, we will strive to represent each of you in a professional manner, with our ultimate goal to reach an arrangement regarding the Estate Planning that is mutually advantageous to each of you and is compatible with the interests of each of you. Because we will be representing both of you in carrying out this representation, we must consider the interests of each of you—not the interests of any one person. As you are probably aware, one advantage to separate legal representation for each of you is that your respective legal counsel would be acting solely on your behalf—looking out for your best interests exclusively without regard to the interests of the other person. On the other hand, separate representation for each of you is generally more costly, more contentious, and more time-consuming than joint representation.

2. Disclosure of Information/Open Relationship.

We believe that our firm cannot effectively represent each of you in the Estate Planning if material information disclosed to us by either of you relating to the Estate Planning must be preserved in confidence without disclosure to the other person. Accordingly, if we are to represent the two of you, it will only be with the express understanding that any material information disclosed to our firm by either of you and which relates to the Estate Planning shall be disclosed to the other person if knowledge of such information would be necessary or useful for him or her to make informed decisions regarding the Estate Planning.

3. Attorney-Client Privilege.

We believe that any information disclosed to our firm by either of you during this joint representation and relating to the Estate Planning will not be protected by the attorney-client privilege in the event of a subsequent legal dispute between the two of you relating to the Estate Planning. In addition, our firm would not be able to represent either of you in connection with any such legal dispute and each of you would be required to obtain separate legal counsel.

4. Prior Legal Representation of Husband or Wife.

[Consider including the following paragraph if the attorney or the firm has an existing legal representation with Husband or Wife.]

Our firm is currently performing (and in the past has performed) certain legal services for ____________________________________________________________. We do not believe that our relationship with ___________________ will adversely affect our ability to fairly and impartially represent each of you in the Estate Planning.  If we determine, at any time, that a material bias in favor of ___________________ exists such that our firm cannot fulfill our duties to both of you, then our firm will have to withdraw from this joint representation.

5. Future Conflicts.

At this time, there does not appear to be any difference of opinion between you about the fundamental terms of the Estate Planning. But it may turn out that upon further consultation you have differing opinions about the terms of the Estate Planning, such as the persons who will be the beneficiaries of your estate or the property such persons will receive. If we determine that there are material differences on one or more issues that cannot be resolved amicably or on terms compatible with the mutual best interests of the two of you, then we must at that time withdraw from the joint representation and our firm would not be able to represent either of you in connection with the Estate Planning. If this occurs, we will, if you wish, assist each of you in obtaining new counsel.

6. Legal Fees and Other Charges.

Our legal fees and other costs and expenses in connection with the Estate Planning will be billed to you in the following manner. [Describe the legal fee arrangement in reasonable detail (i.e., hourly, fixed fee, etc.) along with other costs and expenses to be charged.]

If you are in agreement with the terms and conditions of this engagement, please sign and date this letter where indicated below and return it to me in the enclosed pre-paid return envelope. Again, we appreciate the opportunity to represent the two of you. If you have any questions about the terms of this engagement, our billing statements, or any aspect of our representation, please do not hesitate to call me.

                                                              Sincerely,

                                                              Attorney

ACKNOWLEDGED AND AGREED:

_______________________               _________________________

Mr. ___________________                  Date

________________________             _________________________

Mrs. __________________                  Date