Politician Moonlighting as Lawyer Stirs Up Controversy – and Conflicts of Interest

conflict-of-interestCalifornia State Treasurer Bill Lockyer recently announced that he’ll be moonlighting as a lawyer at international firm Brown Rudnick, LLP.

Several commentators have pointed out the potential conflict: Lockyer will offer advice on government and legal matters in other states, while continuing to serve as California’s Treasurer; however, “California isn’t an island, its financial doings quite often move into other states.”

It will come down to Brown Rudnick’s willingness to subject Lockyer’s assignments to “a rigorous internal conflict and ethics review” versus its desire for him to “make it rain by using his considerable influence and connections to hook big clients.”

What are the elements of a “rigorous” conflicts system? Here’s a starting point:

Designate a Conflicts Checker
Many firms allow the attorney requesting the new client or matter to analyze potential conflicts, but this is itself a possible conflict of interest, since the individual with the most interest in opening the matter is deciding whether the work can proceed.

Large firms that don’t have a director of conflicts should have their conflict checks conducted by their general counsel or risk management partner. Smaller firms can hire, assign or develop a conflicts expert and invest that person with decision-making authority. Small firms should at least have a lawyer other than the one seeking to open the matter conduct the conflict analysis.

Know the Rules
All lawyers should know the six Model Rules of Professional Conduct that govern most conflict situations, and the code of professional conduct for each state in which they practice.

Develop Good Procedures
Decide how your firm will analyze conflicts, clear them, and waive them, and then document those practices and educate your staff.

Install An Electronic Database
It should enable you to easily store and retrieve comprehensive information (i.e., it should be easily searchable). It should also be able to search external resources in addition to the database you’re keeping, and have reporting capabilities that will provide you with tangible proof that you’ve run all the necessary checks.

Legal malpractice insurer Lawyers Mutual adds these suggestions:

The system is integrated with other systems; i.e., time and billing and case management;

Provides easy access to conflict data for everyone in the office;

Checks are conducted at the three key stages of the representation: before face-to-face

consultations, before a new file is opened and when a new party enters the case;

Searches check for varying spelling of names and all prior names, corporate affiliates, etc.;

Conflict entries show the party’s relationship with the client;

Checks are conducted when new attorney and staff members join the firm and their list of past

clients;

All parties connected with a case are entered into the system; and

Conflict searches are documented in the file.

A new client list is circulated weekly to all lawyers and staff in the office and is reviewed for possible conflicts.

(Further reading: Important Components of a Conflicts Database)

Don’t Rely Solely on Your Database

A good conflict-checking system will identify conflicts of interest before you begin a representation, but some conflicts arise during representation. Develop policies for identifying and managing these conflict situations.  

Become a Man – or Woman – of Letters

Document the precise nature and scope of the work that you’re going to perform in each matter in an engagement letter to the client. This will stimulate your thinking about the case such that you may identify potential conflicts in this or other cases.  

 Write a declination letter to the client or prospect whenever you identify a conflict of interest that prevents you from undertaking a representation. This will help you prove that an attorney-client relationship was never formed, which in turn should inoculate you from a legal malpractice claim. (You should send a declination whenever you turn a down a representation, regardless of the reason).

 Whenever you close a matter, notify the client via a closing letter. This will help you in any malpractice defense, and allow you to do some marketing at the same time.

Further reading:

The Hazard: Conflicts of Interest – American Bar Association

Best Practices for Avoiding Client Conflicts of Interest – Jay Reeves/Lawyers Mutual Insurance Co.

Maintenance of Conflict Procedures – Marion C. Rice, Esq./New York State Bar Association

Conflict of Interest Self-Audit – Texas Lawyers Insurance Exchange

A Conflicts of Interest Primer – Eric Mosca of InOutsource/Peer to Peer magazine

For many more links on this and other law practice topics, visit http://lawyersinsurer.com/law-firm-risk-management-linkbrary/   

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About Curtis Cooper

Curtis Cooper is principal of Lawyers Insurance Group – Broker For Great Law Firms, which helps attorneys optimize their malpractice coverage. Contact him by phone: (202) 802-6415, or email: ccooper “at” lawyersinsurer.com.

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