What Is a Conflict of Interest in a Law Firm

The comment on the rewording states: “Unless there is a risk that the lawyer`s representation will be `negatively affected`, there is no conflict of interest.” Restatement § 121, cmt. C(I), pp. 247-48. It should be noted that the Standard does not consider an adverse effect on the client in determining whether a prohibited conflict of interest exists. Rather, the provision deals with an adverse effect on the lawyer`s representation of the client. This distinction is important. Thus, the conflict of interest rules do not look at the outcome of the representation, but at the quality of the presentation, regardless of the outcome. LIKE WHAT. In re Cimino, 3 P.3d 398, 401 (Colo. 2000) (“The absence of an offence does not nullify violations of Colo. CPR 1.7(b) or 1.8(a)”). Business relations between lawyers and clients are the subject of extensive civil proceedings and numerous disciplinary proceedings.

In most published decisions, the attorney has in some way violated at least one of the principles of Colo. RPC 1.8 and Restatement § 126. For example, in People v. Nutt, 696 P.2d 242 (Colo. 1984), the Colorado Supreme Court suspended a lawyer after he assisted clients in obtaining financing for a construction project. The lawyer and his mother-in-law provided the funds for the loan without disclosing the source of the funds or disclosing that the lawyer received a $5,000 loan grant fee. The loan was secured by real estate. Clients would have been unlikely to have received funding from traditional sources. The Colorado Supreme Court ruled that the lawyer`s interests as a lender and holder of a long-term mortgage on the client`s property necessarily ran counter to the interests of his clients. The lawyer argued that since the clients would not have been able to obtain financing elsewhere, they were not harmed by his undisclosed conflict and in fact received a benefit from the loan. The Supreme Court agreed that the terms of the loan were fair and that the customers had not suffered any harm, but the court was not disturbed by the “no harm, no fault” argument.

The court stated that “as long as the client is not harmed by counsel`s violation of the Code, this fact is only a mitigating circumstance.” Id., p. 246 (cited People v. Gibbons, 685 P.2d 168, 174 (Colo. 1984)). Lawyers who borrow money from clients are particularly vulnerable to malpractice prosecution or disciplinary discipline, especially if the parties do not remember the loan with a promissory note or if the terms of the promissory note are insufficient or unfavourable to the client. See, for example, People v. Robinson, 853 P.2d 1145 (Colo. 1993) (lawyer suspended after borrowing money from client, but failed to disclose interest and guarantee loan); Menschen v.

Schindelar, 845 P.2d 1146 (Colo. 1993) (lawyer was expelled after borrowing funds from a vulnerable client, failing to disclose insufficient loan security, failing to provide appropriate legal documentation to ensure repayment, and failing to discuss conflicts of interest with client); see also, for example, People v. Potter, 966 p.2d 1060 (colo. 1998); Persons c. Barbieri, 61 pp.3d 488 (Colo. PDJ 2000); People v. Prosecutor B, Case No. 00SA338 (20 November 2001); Menschen v. Doering, 35 pp.3d 719 (Colo. PDJ 2001); In re Cimino, 3 p.3d 398 (Colo. 2000).

Another time when joint conflicts of interest cannot prevent a lawyer from being represented is when both clients sign a conflict of interest waiver. These waivers must generally inform clients of the potential conflict of interest, that each client is able to hire a different lawyer, and that, despite the potential conflict of interest, they still choose to be represented by the conflicting lawyer. Conflicts of interest can only be used in certain situations, and if a reasonable lawyer would be affected by the representation, they cannot use a conflict of interest waiver. An experienced lawyer should know when a waiver of conflict of interest can be used in certain situations, and such a waiver can reduce costs and reduce practical problems of representation. [11] If lawyers representing different clients in the same or substantially related cases are related by blood or closely related by marriage, there may be a significant risk that the client`s trust will be revealed and that the lawyer`s family relationship will compromise both loyalty and independent professional judgment. Therefore, each client has the right to know the existence and implications of the relationship between lawyers before the lawyer agrees to take over representation. For example, a lawyer who is related to another lawyer may: as a parent, child, sibling, or spouse, does not normally represent a client in a matter in which that lawyer represents another party, unless each client gives informed consent.