Conflicts Tune-Up: 5 Steps to Avoiding Conflict of Interest Claims

Every so often, a case about a lawyer removed from a matter or reprimanded for acting while in an “obvious” conflict of interest pops up in the media. These cases make all of us (or at least they should) shake our heads in dismay: Surely everybody knows how to avoid a conflict – don’t they?

LAWPRO claims experience makes it clear that lawyers don’t always accurately identify conflicts… or that sometimes they decide to be wilfully blind. Consider the following a brief primer on how to tune-up your conflict of interest avoidance systems.

There are three typical scenarios that lead to conflicts claims: failure to screen for conflicts; failure to recognize conflicts despite screening; and fooling oneself into acting, despite a conflict, due to greed or to a belief that it “won’t matter”. All three scenarios have the same potential to lead to a claim against the lawyer.

Want to steer clear? Follow these simple steps:

  • When speaking with a new or potential client, record the names of all parties (both individuals and corporate parties) correctly.
  • Take a moment to reflect on who, exactly, is your client. Is an individual giving you instructions on behalf of a corporation? On behalf of corporate directors? On behalf of a shareholder or shareholders of the corporation, rather than the corporation itself? Is the owner of a shared family business hiring you on her own behalf only, or on behalf of all the owners? If a couple is giving you instructions together, are you certain that their interests do not diverge? Pay attention to your instincts. Do not act until you are clear who the client is, and that there is no conflict.
  • Once you fully understand who is retaining you, follow the conflict-checking procedures in place at your firm.
  • If your instincts (or your systems) suggest that there may be a problem, review the situation with a trusted colleague. You may not be able to objectively assess your own conflicts.
  • If a conflict emerges or comes to light after you have begun working on a matter, immediately disclose the conflict and take steps to resolve it. If you need to remove yourself from a matter, do so promptly to avoid any prejudice to the client’s interests.

Finally, be alert to activities, on the part of potential clients, that may be designed to create “tactical” conflicts. For example, some clients, particularly in communities with a limited number of lawyers, have been known to contact multiple lawyers in an attempt to make it difficult for opponents to find counsel who are free of conflicts. One way to avoid being the target of these tactics is to instruct anyone who answers the phone to use a screening form designed to collect sufficient information to identify existing conflicts, while avoiding the collection of confidential information that would create a new conflict. Where a potential client does not retain the lawyer after making this kind of contact, it can be useful to send a non-retainer letter to make it clear that no solicitor-client relationship was created.

This article is by Nora Rock, corporate writer & policy analyst at LAWPRO

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