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Conflict Conundrums - An Introduction to Legal Ethics & Conflicts of Interest

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Conflict Conundrums - An Introduction to Legal Ethics & Conflicts of Interest

Representing both the husband and wife in estate planning? Assisting with the divorce of your favorite friends? Asked to represent co-defendants or multiple family members in a criminal, personal injury, or immigration case? New clients want to pay you with stock in their enterprise? From family law, trust and estates, and business law to criminal, personal injury, and immigration law, conflicts of interest exist as a fundamental concern in the practice of law. If ignored or misunderstood, fundamental concerns can create significant problems for the unwary lawyer. What’s a lawyer to do? Step one: assess whether there is a conflict of interest. Step two: analyze whether it is consent-able or impermissible. Step three: proceed accordingly. This course will explore these steps in the context of the conflict of interest rules and their applications in the everyday practice of law.


Jan L. Jacobowitz
Founder & Owner
Legal Ethics Advisor


Jan Jacobowitz: Hello, and welcome to Conflict Conundrums, an introduction to legal ethics and conflicts of interest. A few questions for you. Representing both the husband and wife in estate planning? Assisting with the divorce of your favorite friend? Ouch. Asked to represent co-defendants or multiple family members in a criminal, personal injury or immigration case? How about new clients want to pay you with stock in their enterprise? Conflicts of interest exist as a fundamental concern in the practice of law. If ignored or misunderstood, fundamental concerns can create significant problems for the unwary lawyer. So what's a lawyer to do? Step one, assess whether there's a conflict of interest. Step two, analyze whether it's consent-able or impermissible. Step three, proceed accordingly. This course will explore these steps in the context of the conflict of interest rules and their applications in the everyday practice of law. Although we've previewed the simple-sounding three steps to determining whether there's a conflict, let's break it down further.

   And I think the easiest way to understand conflicts and how they apply is to first define the type of client that you're talking about, or rather the status of the client. And what do I mean by that? We can divide clients into three main status type, the prospective client, the current client and the former client. And depending upon which type of client you're dealing with, the conflict rules apply somewhat differently. Now we're talking about legal ethics, so before we get to the actual numbers of the conflict rules, let me just lay out to begin with the fundamental rules for effective practice of law... effective and ethical, I usually point out are 1.1... and I'll be using the model rules here, which is competence. 1.3, which is diligence. 1.4, which is communication. And 1.6, which is confidentiality. Now there are many other important rules, but the bottom line is competence tells you, you have to understand what you're doing, what type of client you're taking, the area of law that you're practicing, or be able to learn it.

   Diligence requires you not only to remain diligent in your ongoing education in the law, but it's focused on being diligent with your clients and your clients' cases. So you can see how the two kind of go hand in hand. Confidentiality is one of the underlying tenants of the attorney-client relationship, some would say sacrosanct. And confidentiality extends beyond the attorney-client privilege, which is evidentiary in nature. Confidentiality has to do with everything you learn as part of a representation. And in that way, you can can see that it's going to play a large role in determining conflicts of interest and how to proceed with them.

   So with those few rules as a foundation, let's proceed to discuss and define the three status types of client. The first type of client is referred to as a prospective client, meaning someone that is seeking advice perhaps, but may not become a full-fledged client. The description for prospective clients is found in rule 1.18. And it talks about someone who may be seeking advice initially but doesn't ultimately retain the lawyer or the lawyer doesn't actually take the case. Now, why am I mentioning a perspective client in a conflicts of interest discussion? That's because back to confidentiality being a primary tenant of even a potential attorney-client relationship, it turns out confidential information that may be learned from a perspective client cannot be used in the future to the significant harm of that potential client. So what, you ask? Well, this is a person who is consulting about the possibility of forming an attorney-client relationship, and in that consultation about that possibility may share confidential information.

   And because of that, the lawyer is not allowed to use that information against that perspective client in a case to hurt them. So you can see this can be a problem and the problem is even indicated in the rules. There's two main problems here to look out for. One is the rules do make clear that a client who unilaterally sends a bunch of information, maybe leaves it on a voicemail, sends it through a website without the lawyer's invitation or even knowledge sometimes that it's coming, that is not a perspective client. And that's why you'll see a lot of law firms have disclaimers on their websites to that effect. The other situation to be aware of is sometimes referred to as the beauty contest. What that means is someone may interview a lot of lawyers in town... Say someone's getting divorced and they go to the top divorce lawyers in town and tell them an hour's worth of their details of their marriage and why they want to get divorced. And they do that intentionally to prevent their spouse, soon to be ex, from hiring that person.

   So the rules indicate if there was never any intention for a potential client or perspective client to hire the lawyer, they're not deemed a perspective client. On the other hand, lawyers want to be careful about this. So there's ways to limit those conversations to prevent even being in this situation. So when this is analyzed, whether it's by a court, a disciplinary agency, or just a law firm or lawyer trying to figure out whether an attorney-client relationship was actually formed, which will get us to our next status of current client, some of the variables that are looked at are, this exchange of confidential information. More importantly, the prospective client reasonably believed that he or she was consulting the attorney in the attorney's professional capacity. And the attorney in turn provided some legal advice and, or otherwise acted or indicated that he or she was representing the perspective client.

   And also was this a new perspective client or had the attorney represented this perspective client in the past. And of course, whether there were any fees exchange. So all of these variables helped define whether a prospective client actually became a current client and formed a relationship with an attorney. And it's important to note that in the rules and in the ethics opinions, whether there is an attorney-client relationship, the analysis places primary focus on the reasonable belief of the client. So it has to be reasonable, but still it's more about how the client thought about it than what the lawyer thought about it. So those variables provide a nice segue to our discussion of a current client. If we assume that a relationship has been established using those variables and also best practices, having a retainer letter in writing, not required by all states, especially if it's not for example, a contingency case, but it is the best practice to have in writing.

    And this, just to throw in a few more of the ethics rules, obviously involves communication with the client to explain what the representation is about and what the client can expect. That's why it's better to have it in writing. And it also brings up rule 1.2, which is scope of representation. I didn't mention it, it's sandwich between diligence and competence, but it becomes important in general. And also when we're analyzing conflicts that you've discussed with the client, again, communication exactly what the scope of this representation is. In other words, what you are representing the client for, and what is the limit of the representation. Along with this, there should be a discussion about fees, what type of fees, again, in writing or not, and depending on the requirements of your state, but the client should understand.

   Okay. So assuming we have our current client, we've checked all the boxes on the other ethics rules, it's time to figure out whether there's any conflict of interest or to be on the lookout in general. And what does that mean? So the current conflict of interest rules 1.7 provides that a lawyer shall not represent a client if the representation involves a concurrent conflict of interest. And it defines concurrent conflict of interest as... And I'm reading from the rule. The representation of one client will be directly adverse to another client. Or number two, if there is a significant risk that the representation of one or more clients will be materially limited by the lawyer's responsibilities to another client, a former client or third person, or by the personal interests of the lawyer. So we have what the shorthand for part A1 and A2 as they're referred to. A1 is direct adversity. And A2, sometimes a little more nuance to figure out or understand is shorthand material limitation.

    Now, the rule also provides that not withstanding a conflict, a lawyer may be able to represent a client if number one, the lawyer reasonably believes that the lawyer will be able to provide competent and diligent representation to each affected client. Two, the representation is not prohibited by law. Three, the representation does not involve the assertion of a claim by one client against another client represented by the lawyer in the same litigation or other proceeding before a tribunal, meaning you can't represent both sides of a lawsuit. And four, each affected client gives informed consent confirmed in writing. Before we do some further analysis on this 1.7, it's worthwhile to note that the conflicts of interest rules were enacted and updated to address and secure the undivided loyalty of lawyers to their clients, to enhance the effectiveness of representation, to safeguard clients confidential information, to assist and assure that lawyers would not exploit their client and to protect the legal system in general, in obtaining adequate presentation to the tribunal.

   These are the rationals provided by the restatement of the law governing lawyers. And if we keep them in mind, it's I think beneficial to understand the underlying policy to rules in analyzing whether you conclude and will that any of these tenants or underlying policies are being violated. The two types of conflicts we identify, directly adverse and material limitation. Directly adverse, as I mentioned in the descriptions is most clearly defined as being on both sides of a case. A lawyer cannot represent both sides of a case, and they typically cannot suing a current client in any matter. Generally direct adversity pops up in the litigation setting, but it has been also found in transactional situations where if a lawyer's attempting to represent both sides in a transaction that supposedly arms length, the courts have found that that is a clear conflict of interest. Also in representing multiple client in a situation, for example, in a criminal representation. There was a lawyer disciplined for representing clients together who were stopped in a car when they were arrested and they were charged with the possession of firearms by a felon, they were both felons previously.

   And the court in this case... it was a Florida Supreme Court, found the lawyer guilty of representing clients with a direct adverse interest to one another, because they each had an interest in showing the other possessed a firearm. So direct adversity, while lawyers certainly miss it sometimes, from an analytical or academic standpoint is easier to identify, especially after the fact. Material limitation is a bit more difficult to identify. And remember, it's a substantial risk that the representation of one or more clients will be materially limited by the lawyer's responsibilities to another client, a former client, a third person, or the personal interest of the lawyer. So these type of conflicts can range from perhaps a positional conflict where although permissible, you can be arguing to different positions and unrelated cases for unrelated clients, but one of them is one of the biggest clients at your firm and that client isn't very happy you're representing the other client.

   A lawyer can feel pressure in that situation and it can impact his judgment. Remember it's supposed to be an undivided loyalty. So sometimes lawyers have to decline those type of cases. Also, if a lawyer has a really strong political belief and a client wants representation that is at the opposite end of the political spectrum, it may be that the lawyer can't do his or her most effective job for that client and has to realize maybe let someone else handle the case. There's also situations where perhaps a lawyer has or had stock in one of the companies. There's an interesting case in Florida where an associate in a law firm was moonlighting as a sole practitioner and the court found that the material limitation conflict rule was violated in two ways. His duty to his own clients might have limited his duties or his effectiveness to the firm's clients, or the other way around.

   And by taking clients on his own that the firm didn't know about they couldn't conduct a proper conflict analysis, so they didn't even know if they had an impermissible conflict by having this lawyer work on a case that might have been in conflict with one of his cases in his solo practice. So you may recall, I mentioned that the rule also has a notwithstanding section that allows a lawyer who reasonably believes he can provide, or she can provide effective representation to obtain informed consent from clients and proceed. And I'm saying clients, because often this occurs in representing multiple clients. There are various patterns that emerge, some of which become impermissible conflicts when analyzed by the courts or ethics advisory opinions, or a disciplinary commission and others which allow for informed consent. So let's knock out a couple of those that have been found to be impermissible. And those are typically when there are two plaintiffs suing a single defendant, and they both sustained injuries that exceed 50% of the defendant's insurance policy.

   So if they're suing them individually, and it's the same lawyer, an ethics advisory panel concluded that that was mandated withdrawal from representing one of them, because it would be a race to the proceeds of the policy. And again, if we're going back to a lawyer's undivided loyalty, it would be difficult to sustain in representing both plaintiffs, both injured, not enough money to go around, so to speak. So several state bar ethics opinions have determined that if there's insufficient assets likely to pay an aggregate judgment, then the attorney must decline representation, or he may, or she may determine whether it's possible to obtain consent. Sometimes in this situation, consent can be obtained. And again, we'll get to the elements of consent. If there's an agreement that the plaintiffs will divide the available assets in proportion to their respective judgements or in accordance with some agreement regarding the allocation of resources from the outset.

   Now in a couple of different cases where plaintiffs were generally aligned but then a counterclaim arose, there's been a couple of courts decisions. One came out of Michigan. It was a securities case where all the plaintiffs were alleging that the defendant committed fraud. And the defendant filed a counterclaim pointing out one of the plaintiffs and saying that that plaintiff was responsible for all the other plaintiffs' misfortune. But the court in that case said that the attorney could continue to represent all of the plaintiffs so long as all of the plaintiffs consented to the joint representation after a full disclosure of the impact or effects of multiple representation and getting the advice of independent counsel. And this is also in the particular facts of this case. By the way, conflicts cases are always, as you can imagine, extremely fact specific. The court said, before even the consent, all of the plaintiffs had to also be aligned in their feelings that the defendant committed fraud and not one of the plaintiffs, regardless of what the defendant's counterclaim was attempting to assert.

   In another case from Pennsylvania, or I'm sorry, the state of Washington, there was a married couple that was in a car accident. And at a certain point, the driver of the other car filed a counterclaim saying that actually the husband who was driving was contributorily negligent. And there was a debate about whether the lawyer could continue to represent the spouses. And the Washington court said in accordance with the direct adversity rule that they could continue to be represented jointly so long as there was informed consent, they understood the repercussions of having a joint representation. And the court took that opportunity to say, "By the way, whenever there's a passenger and a driver, there's always a potentially conflicting interest. And so this should always be a discussion when representing clients. Meaning, informed consent should be obtained." Let's move on to understanding and defining informed consent. Before we get to the third type or status of client, which is former client, because inform consent runs across the board.

   So there's four different attributes of informed consent that have been written in the literature. One, all of this is explained to a client or clients, the ways in which their interests could come into conflict. Two, the possible hampering of their respective claims, if they were to agree not to take conflicting positions. The possible increased cost and disruption, if it were necessary for either or both clients to retain new counsel later. And for the implications concerning compensation, if it's a contingency fee case. There's court decisions talking about whether informed consent had actually been obtained. And they range from a client having studied a consent form for 20 minutes prior to signing it and the form, including an explanation of potential conflicts and legal right being upheld. That's a California case. And that case also stress that attorneys are not required to disclose every possible consequence of a conflict in order for consent to be valid, so long as the clients understand the general issues with joint representation.

   Then maybe to the other side is a court case where there 40 plaintiffs suing over the death of a relative and a magistrate judge found a conflict of interest between the heirs and non-heir plaintiffs and ordered the plaintiff's law firm to fully disclose possible future conflicts to all the plaintiff. And while the law firm obtained statements from the plaintiff saying that the conflicts were explained to them after amply discussing the matter that they had all consented, the generalized language that that law firm used and counsel's refusal apparently to acknowledge the severity of the potential conflict had a district court judge reject all of the statements and order individual questioning of each plaintiff. So very costly and time consuming. So the degree of explanation to a client is important or maybe extremely important if it's challenged. Going about getting informed consent becomes really important. And the district of Columbia bar has endorsed what they call a joint statement of facts tests to evaluate whether consent is informed. And by the way, a court may in its discretion, determine even if it was informed consent that they think a conflict is impermissible.

   But backing up let's visit the district of Columbia's test because we want to equip ourselves with the best possible chance of obtaining informed consent. So it's a seven part test, actually it's a nine part test. Let me just read it to you. Number one, the co-parties agree to a single comprehensive statement of facts describing the occurrence. So we're making sure just from the outset that the plaintiffs agree on what their case and what their claims are. Two, the attorney reviews the statement of facts from the perspective of each of the parties and determines that it does not support a claim by one against the other. So their facts line up and they're not even subtly pointing a finger at one another. Three, the attorney determines that no additional facts are known by each party, which might give rise to an independent basis of liability against the other or against themselves by the other.

   So this is where being a lawyer comes in because even if the clients come in and believe they're aligned, if they're in an area of law where the lawyer can anticipate a claim may be viable as between the two, especially as facts develop, the lawyer needs to understand that and is in a position to understand it better than the parties that have come in for joint representation. So we're up to number four. Number four, the attorney advises each party as to the possible theories of recovery, which each may be foregoing through this joint representation based on the disclosed fact. So if they might have proceeded somewhat differently, if they filed independent lawsuits, that's what number four is about. And number five follows with each party agrees to forego any claim or defense against the other, based on the facts known by each at the time. So the lawyers now determine whether they could possibly under the current facts, have any claims against one another and they agree they're not going to pursue those. Again, on the facts known at that time.

   Number six, each party agrees that the attorney is free to disclose to the other party at the attorney's discretion all facts obtained by the attorney. And this is important because this highlights again, confidentiality and the importance of it in relationships. And if you are going to have confidentiality and you have joint clients and you can't share information, it becomes problematic, which is a whole nother subtopic. But for this test, we're having the clients agree that this information can be shared. Number seven, the attorney outlines potential pitfalls in multiple representation and advises each party of the opportunity to seek the opinion of independent counsel as to the advisability of the proposed multiple representation. And each either consults separate counsel or advises that no separate consideration is desired.

   This is another really important provision, and it's a best practice, regardless of the fact we're reviewing it in the context of this DC analysis. Because if you advise a client to seek independent counsel, it's great if they do, or if they knowingly decline, you've given them an opportunity to explore all the potential advantages but disadvantage of multiple representation, to the extent they exist in a particular case. Number eight, each party acknowledges that the facts not mention now but later discover may reveal differing interest, which, if they do not compromise, these differences may require the attorney to withdraw from representation of both without injuring either.

   So we may see this when we do some hypotheticals at the end. But this is just giving the clients essentially a heads up to say, "Look, as we get into discovery and we find other facts, if it turns out that there's facts that reveal themselves, that show that actually the parties have divergent interests, the attorney may need to step out." And then the final one is just that each party agrees the attorney may represent both in the litigation. So that's sort of the obvious one, but also obviously necessary. So assuming a lawyer has informed consent, what might arise later? One frequent example is settlement issues that arise. So when one party wants to settle and the other doesn't, or there could be several plaintiffs, that creates a problem. Sometimes a plaintiff wants to make a statement and wants to go all the way to trial and co-plaintiffs want to settle.

   Sometimes there's a mediation where one person wants to settle and the other two don't, and so this creates a conflict among clients. And it's actually addressed in rule 1.8, which is an other conflicts rule that talks about not making an aggregate settlement without the consent of clients. So if clients don't agree, sometimes the lawyer must withdraw. If it's a mediation and the mediation fails because it's an all or nothing proposal, then the courts have held that a lawyer can go forward and represent all of the plaintiffs in trial. So just something to keep in mind, as again mentioned in rule 1.8, but in the context of informed consent and problems arising later, and problems that should be explained to clients when you go through, whether it's the DC nine part series of steps for informed consent or another method.

   Okay. So a mini mid-game recap, we've talked about prospective clients, we've talked about current clients, which is the real meat of the conflict rule 1.7 and attempted to distinguish direct adversity and material limitation, and learning that if something is consent-able, it's very important to develop a method of establishing informed consent, not only for the good of the client but to protect the lawyer if there's any challenge later on. So let's move on to our third status of client, which a former client, and talk about what obligations under the conflict rules are attributed to the former client. And we'll circle back and distinguish what's owed to the former client from what's owed to the perspective client. Because they are neither clients of the lawyer, presumably at this moment in time when the lawyer is dealing with taking a case for a current client, and whether there is a conflict that implicates a former or perspective client.

   So what is a former client? Well, just as a best practice note, a former client is best defined by a client who has received a case closing letter. Just as there is best practice to have an engagement letter or retainer letter, it is best practice to terminate a case. The termination rule for those of you keeping score of the rules is 1.16. And it discusses both reasons where a lawyer may and in some states must withdraw from a case. And so if you have to withdraw in a conflict situation, you may look at that rule. But the point I'm making here is a former client is someone you're no longer representing, and that client should be aware you're no longer representing them. That sounds obvious, but sometimes it's not. So one last time, send a closing letter to the client.

   The rule that applies to former clients for conflicts purposes is rule 1.9. And that rule essentially dictates that a lawyer who's formally represented a client in a matter shall not thereafter represent another person in the same or a substantially related matter in which that person's interests are materially adverse to the interests of the former client, unless the former client gives informed consent confirmed in writing. So we've gone over informed consent and it would be a variation on that theme. What is tricky to define is materially adverse to the interests of the former client and the term substantially related matter. So often when I've taught this in law school, students initially think, "Well, it's a completely different matter, so it's not substantially related."

   Meaning, you represented somebody in their business and later their husband comes to you to divorce them. And so the divorce has nothing to do with the representation you did in the business, and again, we'll do some hypotheticals later, but it is substantially related in that the information that you learned about the business and the assets is likely something that you could use in a material adverse way against the wife, it's her business, if you represent the husband.

   So substantially related can be tricky because it doesn't necessarily mean the same type of case. It means information that you received or are presumed to have received by virtue of your former representation of the client that might be used adversely against that former client in a current client proceeding. So that may sound a little bit like, who's on first, but we're going to flush it out in a few minutes with some hypotheticals. First, let's just go back and compare a lawyers' obligation to a former client as opposed to a prospective client. And to help us, fortunately the ABA standing committee on ethics and professional responsibility released Formal Opinion 492 in June of 2020, so pretty recently, and distinguish former client from perspective client in terms of obligation. So while rule 1.18, as you may recall, pertains to a perspective client, and that rule says, "A lawyer who has learned information from a perspective client shall not use or reveal that information except as rule 1.9 would permit, with respect to information of a former client" creates a bit of confusion.

   So we understand that a lawyer who's met with a prospective client has to protect all the information learned during the consultation, unless the lawyer has otherwise gotten informed consent of the prospective client that it won't be maintained, but the difference stems in the words significantly harmful. So rule 1.18, and this is in sub C, says, "A lawyer subject to paragraph B, 'which we just went over,' shall not represent a client with interest materially adverse to those of a prospective client in the same or substantial related matter, if the lawyer received information from the prospective client that could be significantly harmful to the person in that matter." The comment to that rule, it further explains that prospective client should receive some but not all of the protection afforded to clients. So that means current or former clients. And the way the opinion explains further, the distinction is a former client need not reveal confidential information to satisfy the substantial relationship tests.

   This is a quote from the opinion. "Matters are substantially related for the purposes of rule 1.9, if they involve the same transaction or legal dispute, or if there's otherwise a substantial risk, that confidential factual information as would normally have been obtained in a prior representation would materially advance the client's position in a subsequent matter." So what they're saying here is there's a presumption for a former client that does not exist for a perspective client. A perspective client is tied to information actually given to the lawyer. This avoids a detailed investigation or a breach of confidentiality into what was actually obtained in that former client's representation. There's a certain presumption there. Of whereas the prospective client had to have actually communicated information that could be significantly harmful in a subsequent matter. And this part of the discussion, if you're wondering, "Well, what's significantly harmful because the former client has a presumption?"

   So a prospective client, some of the information designated to be potentially significantly harmful are things like views on various settlement issues, including price and timing, personal accounts of relevant events and the perspective client strategic thinking about how to manage the situation, and an outline of potential claims against the defendant and specifics as to the amount of money needed to settle a case. So you can see where this could be significantly harmful if a lawyer then opted to represent the opposing side. So just want to make that distinction. And I also want to point out at this point, this is an introduction of conflicts of interest. And this is one of the most difficult nuanced areas I believe in the ethics rules, where there are debates among experts on various fact patterns and where we're going to look at some more basic fact patterns. And we're trying in this course to give you the fundamentals and to increase awareness so that perhaps you can develop that gut instinct that says, "Ooh, maybe this is a conflict. Let me look further."

   And before we get to the hypotheticals, let me also just mention... I mentioned rule 1.8 before in terms of aggregate settlements. And 1.8 is a whole nother conflict rule that's sort of a catch all of miscellaneous conflict situations. The other two I just want to highlight for today are transactions with clients and a third party paying legal fees. So the third party paying legal fees is a more simple one in that, yes, someone else can be paying your client's legal fees. It could be a relative, it could be a friend. And the main requirement there is the confidentiality remains between the client and the lawyer and the person paying the fees has no right to call the shots, so to speak. They're not the client and they're not to impose their will on the professional, independent judgment of the lawyer. The other one, transactions with clients has to do with, if you're going to take stock or fees, or if you're otherwise going to go into business with a client... and this could be a whole nother broad topic.

   But the nutshell version is that the situation has to be fair and reasonable. It can't be an interest in something you're litigating over on behalf of the client. So it can be another business or perhaps you're taking stock in lieu of fees. Again, fair and reasonable. Reasonable if you're taking something in lieu of fees, ties back to rule 1.5, that all fees must be reasonable and not excessive. And encourages again, like in the other conflict situation for informed consent, to encourage your client to seek independent legal counsel, or at least ensure that the client has the opportunity to do so, and then get consent in writing for what you're doing. So again, we could do a 3, 4, 5 part series on conflicts, but I just want to mention those two and then we're going to look at a few hypotheticals. Okay, here we go.

   Hypothetical one, family law. Friends as clients. In the good times and the bad, [Larry 00:49:07] and [Frank 00:49:08] have been friends since childhood. When Larry opens his own law office, Frank, a high school teacher offers immediate support. Frank's wife, [Wendy 00:49:19], is starting a new business and needs legal assistance. Larry has known Wendy since she and Frank met in college and is thrilled to have Wendy become a client. 10 years later, Larry and Frank are at a dinner celebrating Frank's teacher of the year award when Frank shares that Wendy's business has become extremely successful, but their marriage is suffering. Wendy works long hours, and they seem to have grown apart. Larry sympathizes offering him words of comfort, offering Frank that is. As they leave, Frank asks if he can count on Larry's support and assistance. And Larry replies, "Of course." The next week, Larry receives a panic phone call from Frank, who shares that he saw a text between Wendy and her friend in which Wendy is asking for a referral to a divorce attorney.

   Frank sounds distraught and asks Larry to file a divorce complaint immediately so that Frank can attempt to save face and gain some leverage. Larry offers a referral to another lawyer and explains that he does not want to get in the middle of the marriage due to his longstanding friendship with both of them. Frank sounds close to tears and begs Larry. Frank says that Larry promised to represent Frank at the celebration dinner. After extended please and Frank's near breakdown on the phone, Larry agrees to represent Frank, so long as the situation remains cordial. Larry adamantly states that if Frank decides that he wants to play hardball, then he will have to retain another lawyer. Relieved, Frank thanks Larry and assures him that the process will remain cordial. The next day, Wendy calls Larry to schedule an appointment to discuss a referral to a family lawyer. She informs Larry that she plans to file for divorce and says that she knows Larry cannot represent her on this matter because of his friendship with Frank.

   Larry explains that he is uncomfortable providing a referral. Wendy sounds upset and says that she only wants to discuss options for representation, not any of the details. Larry says that he's sorry, but he cannot meet with her. Wendy starts screaming, "You have been my lawyer for years, I have paid and confided in you. You cannot refuse to see me in my time of need." Larry turns the volume down on his phone and calmly responds, "I will call you back." Larry decides to call Frank first and explains, "I would really love to help you, but because I represented Wendy in her business, it's not a good idea." As Frank begins to unravel, Larry thinks of another approach. "How about this?" He says. "I'm a certified mediator in family law. If Wendy agrees, I will try to mediate your divorce. We can all get together, have a few drinks and try to work out a separation agreement."

   Frank sounds relieved again and agrees to ask Wendy. So let's unpack this fact pattern and let's apply our, what's the status of the clients, definition. So if Larry the lawyer, now we have Frank, they've been friends. So the question is, is Frank a prospective client? Is he a current client? We know he is not a former client because Wendy is the one that Larry has represented. So first let's deal with Frank. When Frank goes out to dinner and they're celebrating his award and he bemoans the state of his marriage and asks if he can count on Larry's support. And Larry says, of course, does that make him a client? Does that make him a prospective client? It's debatable. Because perhaps that's just two friends talking. And of course you're going to support and help a friend out who's got marriage troubles.

   If we go back to our perspective, client analysis, it's not really clear that he was asking for specific legal assistance. There's no indication Larry gave Frank any legal advice. Obviously no money has exchanged hands and it looks like it was a pretty brief conversation. So you can argue he's a client. I would say at most, perhaps he's a perspective client, or maybe he's just a troubled friend. But the following week when the panic phone call comes from Frank to Larry, and Larry initially offers to refer Frank because he doesn't want to get in the middle of their marriage, and then Frank gets so upset that he moves Larry to represent him but Larry puts a condition that it must remain cordial and says, if he wants a really tough lawyer, he'll have to get someone else.

   At this point, we can deem Frank to be a current client. Larry's agreed to represent him. Now we might wonder at this point, before we even get to Wendy, whether there's already a material limitation here because Larry telling Frank that it has to remain cordial no matter what, makes one wonder whether he is going to be as aggressive as maybe necessary. And by aggressive, I don't mean incivility. I just mean being as strategically aggressive in a negotiation. But before we go along with Larry representing Frank, let's discuss Wendy. Wendy, is she a current client? Is she a former client? We don't really know from this fact pattern. We know at a minimum, she's a former client. But Wendy, when she's screaming says, "You have been my lawyer for years." So if she's a current client or she believes she is, and there's been no closing letter sent to her and presume that he's helped her sometime relatively recently within the past year and on an ongoing basis, she's going to be a current client.

   So he now has two current clients, if we deem her a current client, that are adverse to one another. If we deem her a former client and perhaps she is, we don't know, if she's a former client, this is exactly the type of situation we discussed before where Larry, no doubt has information that he obtained, or we can presume he obtained about her financial situation, the assets of the business, that are going to be part and parcel of any type of settlement agreement and divorce. And so he cannot use that information against her, and basically he's got a problem. And perhaps he belatedly realizes, or maybe all along kind of realize, but emotions got in his way and suggest in the end, "Okay, I'm a certified mediator, let's go out for drinks and work this out." Well, this isn't a course on mediation, but I'm here to also tell you that mediators cannot mediate when there's a conflict of interest.

   And even if they disclose it, even if the clients consented here, in a mediation in most states, the code would provide that this would not be consent-able because really how can you be in the middle of two friends and remain neutral in a mediation setting? So hopefully Larry, hasn't lost both of his friends here, but really Larry can't represent either one of them. And it's a very good hypothetical I think for the part that we all have friends, and even in law school, friends and relatives start asking legal questions even before we're able to technically answer them.

   And so it's best both from a direct adversity standpoint, in this case, and material limitation, your feelings for one friend or another to avoid these situations. So let's move on to a few more shorter hypotheticals. Hypothetical two, estate planning. Keeping secret husbands new bequest. This is a classic fact pattern that has occurred repeatedly and actually forms the basis for a Florida ethics opinion. Larry lawyer has represented Howard and Wilma for 15 years in several personal matters, including estate planning. Howard and Wilma, each maintain substantial individual assets and also own substantial jointly held property.

   They have three children and have been married for 30 years during which they have become extremely financially successful. From time to time, Howard and Wilma visit Larry to update their wills. Each time the goal is to leave everything first to the surviving spouse and upon their death, then equally to their three children. They meet with Larry and share all of their financial information. Neither Wilma or Howard have ever asked for a separate meeting or considered any information to be confidential from one another. However, unbeknownst to Larry or Wilma, Howard recently retained another lawyer to draft a codicil to his will in order to make a substantial bequest to a woman with whom Howard is having an affair. Once Howard executes the codicil, he informs Larry about it and asks how it will impact the distribution of Howard's assets if he should pre-decease Wilma. He explains that Wilma does not know about the codicil or the affair.

   So this time, presumably Larry's not in the middle of friends, Howard and Wilma, but they are longstanding clients. And they've always had until now, their interests align in that they have similar goals, they wanted or wills and perhaps any trust they have to operate similarly. So while Howard did get another lawyer to draft this codicil, he's now put Larry in a conflict. And what the Florida opinion held and what is generally the case is that Larry can't really represent either of them anymore because he now has information that Howard doesn't want Wilma to know that impacts the trust and estate documents of Wilma and Howard. And so best advice is to withdraw from representing both of them. He can maintain Howard's confidentiality because he asked him to and tell Wilma a conflict has arisen and let Wilma pursue it with Howard, I suppose. But he can no longer represent either one of them now that he has this knowledge because it's obviously adverse to Wilma and telling Wilma is adverse to Howard, whatever's going to happen there.

   Under the immigration law category, conflicting stories. [Miguel 01:02:23] and [Bella Morales 01:02:24] are married, undocumented citizens. After running away from their country, they move to the United States with the intention of staying. A friend of Miguel recommends a lawyer [Luciana Perez 01:02:39], to help him stay here legally. Luciana meets with Miguel and Bella and asks them what their motive is for coming to the United States. Miguel nervously responds, "We fled because I was tortured. The government was trying to kill my family." Luciana explains to them that with all the proper documentation, they will be able to apply for asylum. Luciana assists Bella and Miguel in applying for asylum. She works with them for several months together, the necessary information for the interview. Miguel provides all the documentation regarding the kidnapping and the torture. A few weeks before the interview, Bella calls Luciana crying and tells her that she cannot attend the interview.

   Luciana responds, "Why not? This is your best shot at getting legal status." Bella pauses and tells Luciana, "I cannot remain married to someone who is abusing me. I actually fled our country because of Miguel, but he found me and told me that if we didn't apply for asylum together he would kill me. Miguel fabricated his story." Bella then hangs up. After the troubling conversation, Luciana tries contacting Bella again but fails. Confused by Bella's statement. Luciana decides to do some digging. Luciana verifies Bella's accusations and finds out Miguel was never tortured, but rather fled the country because he was involved in a financial scam. So unfortunately it's not an unusual fact pattern in immigration law for one party, generally the female to give wind to the fact that she is being abused by her partner or her husband. It can sometimes be a foreign or an undocumented person getting married to an American citizen.

   So without getting too caught up in the facts of Miguel and Bella, the problem here is one of course of conflict because if Bella is being abused, there is another way for her to seek relief in the state under a victim's act. And it's called a VAWA petition. But in order to obtain that she would need to call the police and complain about her husband. So Luciana can't advise Bella as much as she might like to help her if she is in fact the victim of abuse and she can't go forward with their case now that she has somehow learned that their case is not based on the actual facts. In other words... and this is another rule 3.3 candor to the tribunal that we don't want to get sidetracked here. But the bottom line is she has clients telling two different stories and one client, Bella, saying that her husband's story Miguel's, is not true.

   And so Luciana needs to withdraw from this case and refer them to other counsel, assuming she can get in contact with both of them. And that brings us to the end of this introduction to conflicts. And just in conclusion, you can see that it's a really important fundamental area of the practice of law. And it's extremely important to be thinking about conflicts, to in a law firm, have a system for checking conflicts when you take in a new case if you have a large client base, and to avoid trouble, both with clients, with the courts, with the other side, asking to disqualify you, with disciplinary agencies. And remembering because conflicts goes to the basic underlying principle of loyalty to the client and protection of the client and the client's confidentiality, it's really yet another fundamental area of legal ethics. Thank you for listening and bye for now.

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