What Information Do You Need to Evaluate Potential Conflicts?
The information required to evaluate a conflict of interest will be unique to each circumstance. Generally, to conduct conflict analysis, you need to identify information about the potential client, the area of law at issue, and the general nature of the dispute if the work to be performed is contentious. If the potential client is an entity, you may want to collect additional information, such as the entity’s full legal name, aliases, state of incorporation, and headquarters address. If the potential client is an individual, the conflict process may include the individual’s legal name, any common aliases, and the individual’s personal address. Some firms may look to additional factors when checking for conflicts. For example, they may require information about whom the main client contact is, other high-level company personnel, related entities, and personal relationships or board positions held by the attorneys at the firm.
If a potential matter is adversarial in nature, the conflict check process may also include information about the opposing party, opposing counsel, where the action is pending or will be brought, and the general subject matter of the dispute. Having basic information about the potential client and matter is necessary to effectively evaluate whether a conflict exists and identify the proper attorneys to assist with the matter. See, e.g., MRPC §§ 1.1 (concerning lawyers’ duty of competence); 1.6 (concerning requirements for declining or terminating representation); 1.18 (concerning duties lawyers owe to prospective clients with respect to conflicts and confidentiality).
When Should Conflict Checks Be Conducted?
A conflict check should be conducted before providing any legal advice and in advance of signing any engagement letter with a potential client. Different rules of professional conduct may apply to conflicts of interest with current clients as opposed to former clients. See, e.g., MRPC §§ 1.7 (current clients); 1.8 (specific rules relating to conflicts for current clients); 1.9 (former clients); 1.10 (conflict rules when clients are entities).
In addition to checking conflicts for a prospective client, it is also good practice to evaluate any conflicts involving potential expert witnesses or third parties that may be implicated in the matter, such as subpoena recipients. While these may not be known at the start of the matter, once these individuals or entities are identified, they can be evaluated.
Law firms may have designated personnel to assist with the evaluation of conflicts. Be aware of how to contact the personnel at your firm who assess conflicts and any training or best practices that your firm employs during the conflict check process.
Finally, in the event your conflict check uncovers an unavoidable conflict that cannot be resolved through waiver or screening, you may want to provide a referral to attorneys at other firms you know in the relevant practice area.
Is The Potential Client a Good Match for Your Firm?
In addition to running a conflict check on all potential clients, all attorneys should also ensure that they or their firm has the resources to support a potential client and that taking on representation of a potential client aligns with a firm’s business objectives. For example, if a potential client requires assistance with a real estate closing, but you and your firm do not have experience with similar matters, it may not be a good match. Likewise, if your firm predominantly works with multinational, well-established companies, it may not align with its business objectives to represent a start-up company looking for an alternative fee arrangement that exchanges equity for a broad range of legal services.
Some firms hold clinics focused on specific legal services for start-up companies under special arrangements, and it would be helpful to coordinate your business development focus with their efforts. Where a potential case is pending may also determine if you have the experience and resources to best serve a client. Firms often have departments (sometimes known as Business Intake) that assist attorneys with evaluating whether a firm can serve a potential client and whether assisting a potential client aligns with a firm’s business objectives.
What Is an Engagement Letter?
If a firm decides to move forward with representing a potential client, an engagement letter between the firm and the client should be executed. In general, an engagement letter between an attorney and client sets forth the scope of the representation, including, but not limited to, confidentiality, client obligations, fee arrangements, and billing practices. Engagement letters may also include provisions pertaining to discounts or specialty rates, retainer arrangements, advanced waivers of conflicts, and other informed consent provisions.
Law firms may sometimes have ethics counsel approve template engagement letters that can be modified for specific client engagements. Often, firms will also have policies as to who can sign engagement letters with clients on behalf of a firm. Be aware of any specific firm policies regarding engagement letters and whether your firm has a template engagement letter. In addition, some clients provide outside counsel guidelines, which firm counsel must review before being accepted.
