A lawyer’s relationship with a client is based largely on trust and confidence, such that the lawyer can provide the best possible representation of the client. Because of the nature of this relationship, a lawyer may frequently encounter a conflict of interest with the client. One instance may occur when one of the lawyer’s clients has an interest that clashes with an interest of another client.
The American Bar Association’s (ABA) Model Rules of Professional Conduct, which have been adopted by the majority of states, forbid or restrict lawyers from representing a client if a conflict exists. Under the Model Rules, a “concurrent conflict of interest” exists when: (1) the lawyer’s representation of one client will be directly adverse to another client; or (2) the lawyer’s representation of one or more clients runs a significant risk of being materially limited by the attorney’s representation of another client, a former client, or a third person.
The Model Rules allow a lawyer to represent a client notwithstanding a conflict of interest when each of the following four criteria are met: the lawyer reasonably believes that he or she can still provide competent and diligent representation in spite of the conflict; the lawyer’s representation of the client is not prohibited by law; the representation does not involve an instance where a claim by one of the lawyer’s clients is brought against another of the lawyer’s clients in the same litigation or other proceeding before a tribunal; and each affected client provides consent in writing after being informed of the conflict.
Under the Model Rules, a lawyer may neither engage in a business practice with a client nor acquire an ownership, possessory, security, or other pecuniary interest that is adverse to the client. The exception to this rule applies when the terms of the transaction are reasonable and fair to the client and are fully disclosed in writing; the client is advised in writing that he or she should seek the advice of independent legal counsel regarding the transaction; and “the client gives informed consent, in a writing signed by the client, to the essential terms of the transaction and the lawyer’s role in the transaction, including whether the lawyer is representing the client in the transaction.”
Lawyers are also limited from engaging in specified conduct that would involve conflicts of interest. These types of conduct include the following:
- Using information relating to the representation of a client to the disadvantage of the client unless the client gives informed consent.
- Soliciting any substantial gift from a client, including a testamentary gift, unless the client is related to the lawyer.
- Negotiating an agreement that gives the lawyer literary or media right to a portrayal or accounted based on information relating to the representation.
- Providing financial assistance to a client in connection with pending or contemplated litigation, except that a lawyer may advance court costs on behalf of a client or pay the court costs and expenses of an indigent client.
- Accepting compensation for representing a client from someone other than the client, unless the client gives informed consent, the payment of compensation does not interfere with the lawyer’s independence of professional judgment or with the lawyer-client relationship, and the information pertaining to the client remains confidential.
- Acquiring a proprietary interest in a client’s cause of action or the subject matter of a client’s case, except in certain situations.
- Having sexual relations with a client unless a consensual sexual relationship existed between the lawyer and client when the lawyer-client relationship began.
The Model Rules also restrict lawyers from representing a client where a conflict of interest may exist between the prospective client and another member of the firm. The Model Rules likewise limit lawyers from representing someone who has interests that are adverse to one of the lawyer’s former clients.