Wednesday, October 5, 2022
Law \ Legal

Conflicts Considerations — Indiana Advisory Opinion Outlines Law Firm Conflicts “Ethical Minefields”


Disciplinary Commission publishes advisory opinion on conflicts of interest”

  • “The Indiana Supreme Court Disciplinary Commission has issued an advisory opinion focused on when attorneys must decline to represent a client or withdraw from a current representation due to a conflict of interest.”
  • “‘While realized and potential conflicts inevitably arise in one’s practice, attorneys must be diligent to avoid damaging the interests of those to whom they owe a duty,’ the commission wrote. ‘To that end, it is vitally important that attorneys have a thorough conflicts check procedure in place.’”
  • “‘Conflicts analysis is nuanced and fact specific,’ it continued. ‘Attorneys should carefully evaluate who the actors are and what interests are at stake in a matter. Thought should be given as tohow potentially far-reaching the effects of the representation are to avoid damaging the interests of someone to whom the attorney owes a duty but who may not even be a party to the instant matter.”
  • “In its July 2022 advisory opinion, the commission posed four hypothetical ‘ethical minefields’”:
    • “The first hypothetical situation concerns duties to prospective clients. In that scenario, the commission presented a hypothetical dissolution case in which a wife comes to a law office seeking help and offers material information to an attorney. Ultimately the lawyer isn’t retained, but three weeks later the husband hires the lawyer to represent him in the dissolution proceeding.”
    • “The second hypothetical presents a scenario in which four individuals who form a limited liability company, each owning 25% shares, insist that a lawyer represent each of them individually and agree to waive all conflicts. However, it quickly appears that one of the individuals, individual A, will contribute the lion’s share of monetary funding to start the LLC.”
    • “In the third hypothetical, the Disciplinary Commission gave the example of a lawyer who served as a client’s go-to for all legal questions and representation needs for many years. One day, the client approached the lawyer with an offer: The lawyer would provide legal services to the client’s business, Widget Corp., for two years in exchange for 5,000 shares of stock in Widget Corp. The lawyer accepted the offer and agreed to continue representing the client in his individual capacity in addition to representing Widget Corp.”
    • “In the final hypothetical, the commission gave an example of a conflict that might arise during representation. Specifically, a lawyer has represented Client A, a bricklayer, for years and is currently representing Client A in contract negotiations with a supplier. The lawyer was just hired by Client B, a homeowner, for a potential lawsuit against Client B’s builder due to water seeping into Client B’s home. After Client B’s suit against the builder is filed, the builder files a third-party complaint against Client A claiming that all damage to the home is due to faulty bricklaying. Client A calls the lawyer and asks him to represent Client A in Client B’s lawsuit.”
  • For the Court’s review of those scenarios in detail, see the complete opinion: “Detecting and Navigating Conflicts of Interest.

 



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