What's a Conflict of Interest?

"An attorney told me she couldn’t take my case because of a conflict of interest. What’s that about?”

When prospective clients ask to speak to me about a case, the first thing I have to do is to conduct a “conflict check” – a review of my current and past dealings and associations – to try and avoid conflicts of interest. Conflicts of interest can be actual or perceived, but can have serious implications in either form. Attorneys can find themselves in hot water and even put their clients at risk if they aren’t thorough in their investigation of potential conflicts

Mississippi’s ethics rules for attorneys say:

A lawyer shall not represent a client if the representation of that client will be directly adverse to another client, unless the lawyer reasonably believes:

(1) the representation will not adversely affect the relationship with the other client; and

(2) each client has given knowing and informed consent after consultation. The consultation shall include explanation of the implications of the adverse representation and the advantages and risks involved.

(Mississippi Rules of Professional Conduct, Rule 1.7)

An example of this kind of conflict would be in a divorce case where one spouse has consulted with an attorney but not gone on to hire that attorney. The attorney cannot then consult with nor be retained by the other spouse.

The rules go on to say:

A lawyer shall not represent a client if the representation of that client may be materially limited by the lawyer's responsibilities to another client or to a third person, or by the lawyer's own interests, unless the lawyer reasonably believes:

(1) the representation will not be adversely affected; and

(2) the client has given knowing and informed consent after consultation.

(Mississippi Rules of Professional Conduct, Rule 1.7)

Under this rule, the conflict of interest might be the attorney’s relationship with a third party, such as a close friend who stands to benefit or lose depending on the outcome of a case. Perhaps the relationship would not actually taint the lawyer’s representation of his client, but the perception that such a conflict exists may be strong enough to cause outsiders to question the attorney’s loyalty to the client.

Conflicts also apply to former clients:

A lawyer who has formerly represented a client in a matter shall not thereafter:

(a) represent another in the same or a substantially related matter in which that person's interests are materially adverse to the interest of the former client unless the former client consents after consultation; or

(b) use information relating to the representation to the disadvantage of the former client except as Rule 1.6 would permit with respect to a client or when the information has become generally known.

(Mississippi Rules of Professional Conduct, Rule 1.9)

The prohibition on using information related to the representation of a former client has far-reaching implications. Attorneys must be careful when taking on new cases to make sure they are aware of the interests of past clients. The last thing you want is for your attorney to realize he has a conflict because of a previous client in the middle of your case!

Conflict of interest checks aren’t only for small or single-lawyer firms. One lawyer with a conflict of interest in a multi-lawyer firm can disqualify the entire firm. That’s why conflict checks at larger firms can take additional time to complete.

Determining conflicts of interest is a tedious and difficult task. It’s never convenient for an attorney to have to decline representation because of a conflict, and it is frustrating to you if they can’t explain their decision due to confidentiality rules. The conflict could have any number of explanations, but some of the more common reasons are as follows:

1. The attorney has consulted with and/or been retained by another person in the case or potential case.

2. The attorney has another client whose interests may overlap or conflict with yours.

3. The attorney has a previous client whose interests may be at odds with yours.

4. The attorney has “inside information” on the matter because of a former client.

5. Circumstances exist that may call into question the lawyer’s professional independence, loyalty, or confidentiality.

The thing to remember is that attorneys are bound by rules designed to keep their practices ethical. If an attorney declines to represent you because of a conflict of interest, it is likely that such a decision is also in your best interests.