Steve Schwartz
As published in the June 2024 edition of Missouri Lawyers Weekly
Conflicts of interest pose a significant ethical challenge for lawyers and, if a client is harmed by a conflict of interest, conflicts can lead to a suit for malpractice or breach of fiduciary duty. In Missouri, the ethical rules defining conflicts of interest are set forth in Supreme Court Rules 4-1.7 through 4-1.9. The rules are designed to assure that lawyers can provide impartial, competent, loyal and zealous representation to their clients.
Conflicts usually fall into one of the three following categories:
Personal and business relationships: If a lawyer has a close personal relationship, a family relationship or a business relationship with a client, the lawyer may have difficulty maintaining objectivity and providing impartial advice. A lawyer is prohibited from having a sexual relationship with a client unless the relationship started before the lawyer started representing the client. Rule 4-1.8(j). Rule 4-1.8(a) sets forth the rule regarding lawyers entering into business relationships with clients.
Former clients: A lawyer who has formerly represented a client in a matter may not represent another person in a same or substantially related matter in which that person’s interests are materially adverse to the interests of the former client. However, the former client can waive the conflict in writing, after being fully informed of the ramifications of the potential conflict. Rule 4-1.9(a).
To avoid conflicts of interest, lawyers should consider the following strategies:
Search the records: The lawyer must then search their files for all the names of the people and entities who may have an interest in the matter. It is preferable that the search be conducted through conflict-checking software that has a database of current and former clients of the law firm. A manual search is not likely to be efficient, and it is unlikely to be as thorough as conflict checking software. As an additional check, the names of all new matters should be circulated to all attorneys in the law firm so they can spot check for potential conflicts.
Establish clear conflict waivers: If potential conflicts are found, they can be waived with informed consent. The lawyer must assure that the client fully understands the nature and implications of the conflict. The client must waive the conflicts in writing after being fully informed of the ramifications of the potential conflict in writing.
Disclose conflicts promptly: If a conflict of interest arises during the course of representation, disclose it to the affected clients as soon as possible. Provide clients with a full and transparent explanation of the conflict and its potential impact on their legal matters.
Build a culture of ethics: Law firms should build a strong ethical foundation by providing regular training sessions on conflicts of interest. This will help lawyers have the knowledge and skills to identify and address potential conflicts effectively.
Recognize the gray areas: Not all conflicts are black and white. Situations may initially seem innocuous but could evolve into a conflict later.
Seek ethics counsel: Ethical issues can be tricky. When in doubt, seek advice from a senior partner, in-house ethics advisor, outside counsel or seek an informal opinion from the Missouri Bar Office of Legal Ethics Counsel. Click here or more information.
Avoiding conflicts of interest is important so that lawyers do not inadvertently violate the ethics rules. It can also prevent claims for legal malpractice and breach of fiduciary duty.
Steven Schwartz is a principal at Brown & James in St. Louis who has defended lawyers in legal malpractice cases, malicious prosecution cases and ethics complaints for more than 30 years. He can be reached at sschwartz@bjpc.com. The views expressed in this article are not intended to be taken as legal advice.