[35] A lawyer for a company or other organization who is also a member of the board of directors should consider whether the responsibilities of the two roles may conflict with each other. The lawyer may be called upon to advise the Corporation on matters concerning the actions of directors. Consideration should be given to the frequency with which such situations may occur, the potential intensity of the conflict, the impact of the lawyer`s resignation from the board of directors, and the possibility that the company may seek legal advice from another lawyer in such situations. If there is a significant risk that the dual role will compromise the lawyer`s independence from professional judgment, the lawyer should not act as a director or cease to act as counsel to the firm in the event of a conflict of interest. The lawyer must draw the attention of other board members to the fact that, in certain circumstances, matters discussed at board meetings while the lawyer is present in his or her capacity as a director may not be protected by solicitor-client privilege and that conflicts of interest may require the lawyer to be rejected as a director or require the lawyer and law firm to represent the corporation in a matter. Reject. Conflict of laws principles are all the more urgent in the context of the United States because many states have their own laws that are different from the laws of other states. In 1938, the Supreme Court ruled that all federal courts must respect the conflict of laws rules of the state in which they hear the case. [16] Paragraph (b)(2) describes conflicts that cannot be consented to because the representation is prohibited by applicable law. For example, the substantive law of some states provides that the same attorney may not represent more than one defendant in a capital case, even with the client`s consent, and federal criminal law prohibits certain representations by a former government prosecutor despite the former client`s informed consent. In addition, in some states, the right to decide limits the ability of a government client, such as a municipality, to accept a conflict of interest. n. a situation where a person has an obligation to more than one person or entity, but cannot meet the real or potentially adverse interests of both parties.
This includes when an individual`s personal interests or concerns do not align with what is best for a client, or when the personal interests of a public official run counter to his or her loyalty to public business enterprises. A lawyer, accountant, business consultant or broker cannot represent two parties in a dispute and must even avoid the appearance of conflict. He/she should not connect with a client in the company without fully disclosing his/her potential conflicts, he/she should avoid mixing funds with the client and never take a position detrimental to the client. Restatement § 121, pp. 244-45. The key words and phrases here are “interests”, “significant risk” and “materially and negatively affected”. The conflict of interest analysis therefore includes the examination of (1) interests; (2) what constitutes a “significant risk”; and (3) what does “materially and unfavourably” mean in the circumstances. The restatement identifies four questions to ask when assessing a conflict of interest standard. These questions are: 1) What type of effect is prohibited? 2) How important should this effect be? 3) What is the probability of the effect occurring? and (4) From whose perspective should conflicts of interest be determined? This blog post on lawyers` conflicts of interest is based on a chapter in the 2015 issue of Lawyers` Professional Responsibility in Colorado by attorney Michael T. Mihm, which discusses the current Colorado Attorney Conflict of Interest Act. It is based on Colorado`s Rules of Professional Conduct; the former Colorado Rules of Business Conduct in effect on December 31, 2007 (formerly the Colorado Rules or the former Colorado CPP); Appeal decisions in Colorado; ethical opinions; the ABA Model Rules of Professional Conduct; reformulation (third party) of the Lawyers Act (Restatement); and other resources. [8] Even in the absence of direct interference, a conflict of interest exists where there is a significant risk that a lawyer`s ability to consider, recommend or implement an appropriate course of action for the client will be significantly limited by the lawyer`s other responsibilities or interests.
For example, a lawyer who is asked to represent several individuals who wish to form a joint venture is likely to be significantly limited in his or her ability to recommend or represent all kinds of positions that each may hold because of his or her duty of loyalty to others. The dispute excludes alternatives that would otherwise be available to the client. The mere possibility of consequential damages does not in itself require disclosure and consent. Critical issues are whether a difference in interests will occur and, if so, whether it materially interferes with the lawyer`s independent professional judgment in considering alternatives or rules out courses of action that should reasonably be pursued on behalf of the client. [26] The conflicts of interest referred to in points (a)(1) and (a)(2) arise in contexts other than litigation. For a discussion of directly adverse transactional conflicts, see the commentary [7]. Relevant factors in determining whether there is significant potential for significant limitation are the length and intimacy of the lawyer`s relationship with the client(s) concerned, the functions performed by the lawyer, the likelihood of disagreements arising, and the likely harm to the client as a result of the conflict. The question is often one of proximity and degree.