Many lawyers are married to lawyers, socialize with other lawyers, and count lawyers they have interacted with on a professional level for years as friends. When do these relationships create conflicts of interest that require lawyers to take steps to address the conflict?

The American Bar Association’s Model Rule of Professional Conduct 1.7(a)(2) prohibits a lawyer from representing a client without informed consent where there is a significant risk that the lawyer’s personal interest will materially limit the lawyer’s ability to represent the client.

Comment [11] to Model Rule 1.7(a)(2) discusses how the Model Rule relates to personal interest conflicts based on blood or marriage:

When lawyers representing different clients in the same matter or in substantially related matters are closely related by blood or marriage, there may be a significant risk that client confidences will be revealed and that the lawyer’s family relationship will interfere with both loyalty and independent professional judgment…Thus, a lawyer related to another lawyer, e.g., as parent, child, sibling or spouse, ordinarily may not represent a client in a matter where that lawyer is representing another party, unless each client gives informed consent.

The practical implications of a personal interest conflict are easy enough to identify where the lawyers on opposite sides of a case are related by blood or marriage. For example, there would be a significant risk of a disabling personal interest conflict where a plaintiffs’ personal injury lawyer handling a matter on a contingency fee basis appeared at a settlement conference or mediation where his or her spouse was on the other side of the case. The test is whether the lawyer “reasonably believes” that he or she can continue to provide competent and diligent representation to the client notwithstanding the personal interest conflict. If so, then both clients should provide informed consent, in writing, to permit the lawyer to proceed with the representation notwithstanding the personal interest conflict.

When a client terminates, without cause, its legal representation in a contingent fee matter and subsequently retains new counsel from a different firm, the Rules of Professional Conduct related to the division and disbursement of fees impose certain requirements on the successor attorney. The American Bar Association recently issued Formal Opinion 487¹ (the “Opinion”) to identify the applicable rules, and to clarify the duties owed to the client by the successor attorney.

The Opinion explains that Model Rule 1.5(e) (or its state equivalent) has no application to the division of fees in cases of successive representation.² Such situations are governed by Rule 1.5(b)- (c), which according to the Opinion, require the successor counsel to “notify the client, in writing, that a portion of any contingent fee earned may be paid to the predecessor attorney.”

Outsourcing on the Upswing

In an era where lawyers and law firms seek to run “lean” as a way of keeping costs down, outsourcing legal and nonlegal services once performed in-house by law firms can be a wise financial move. The advent of COVID-19 has accelerated consideration of outsourcing various administrative services so as to streamline back office functions.

‘‘Outsourcing’’ generally refers to ‘‘the practice of taking a specific task or function previously performed within a firm or entity and, for reasons including cost and efficiency, having it performed by an outside service provider.’’ See ABA Commission on Ethics 20/20, Revised Proposal – Outsourcing (Sept. 19, 2001). Due to the COVID-19 pandemic, additional reasons for outsourcing include the need for social distancing and the necessity of firms working remotely.