Q: Dear Ethics Lawyer, I am a banking lawyer who frequently handles acquisitions of banks or branches of banks. Recently, a family-owned bank group in our region has quietly let it be known that it would entertain offers to sell. One of our clients, let’s call them Bank A, contacted me a few days ago to assist them in preparing the legal documents for a bid to purchase it involving a combination of cash and stock. Today another prospective client, Bank B, has contacted one of my partners to assist them in preparing a bid.
I seem to recall from one of your prior columns that this could be a conflict. If so, can’t we just get waivers from both bank groups to allow us to use separate teams of lawyers to assist each bid, each walled off from the other? We won’t be advising on the amount of either bid; our role in each will simply be to prepare a legal offering package, and if successful (in which case, we’d only be representing one of them), the acquisition documents.
The twice-monthly “Dear Ethics Lawyer” column is part of a training regimen of the Legal Ethics Project, authored by Mark Hinderks, former managing partner and counsel to an AmLaw 200 firm. Read More
Conflicts of Interest
April 1 Issue – Conflicts When Undermining Prior Work
Q: Dear Ethics Lawyer, Our firm represented a nearby city in a nuisance claim against the operator of a quarry, arising from its heavy truck traffic. A settlement was reached, by which the quarry operator agreed to allow the City to designate the route its trucks could travel to and from the quarry. Time has passed, and now we’ve been asked to represent several individuals who own land along the designated route to bring a nuisance action against the quarry operator related to the truck traffic. Our former client City would not be a party, and our new clients would be adverse to the same quarry operator we were adverse to before when representing the City. It seems like we’re on the same side as before. Is there any conflict issue here?
Continue Reading April 1 Issue – Conflicts When Undermining Prior WorkMarch 16 Issue – Conflict from Representing Multiple Witnesses
Q: Dear Ethics Lawyer, I have been asked to advise and represent a witness who has been subpoenaed to testify in a civil trial in which her employer is being sued for breach of contract by another business entity who was a party to the contract. I performed a conflict check through our firm’s system and learned that another lawyer in our firm is representing a different witness who is on the parties’ witness list in the same proceeding. Neither of these individuals has a claim against them and neither is making a claim against any of the parties or the other witness. Could there be a conflict here? How do I analyze this?
Continue Reading March 16 Issue – Conflict from Representing Multiple WitnessesJanuary 15 Issue – Positional Conflicts
Q: Dear Ethics Lawyer, I am handling a significant case in which I am preparing to argue to a federal district court in our state that a state law cause of action against our client under relatively recent legislation is preempted by federal law. I’ve just learned that one of my partners in the firm is coincidentally preparing to argue in state court on behalf of a different client that preemption does not apply.
I discovered this by accident, given that our firm (similar to other firms) does not track the specific legal arguments being made over time in individual cases as part of its conflict-checking system. Now that I know about it, what do I do? Is this an actual conflict, or something that will just be difficult to explain to the clients if they find out we are arguing both sides of the same argument at the same time?
December 15 Issue – Conflict with Former Client of Departed Lawyer
Q: Dear Ethics Lawyer, I represented a company let’s call Acme Rocket Cycle Co. while at a firm let’s call Wolf, Wolf and Coyote. I left the firm and took client Acme with me. Only I did any work for Acme while at the firm. May my old firm now represent their client Roadrunner, adverse to Acme, in a new matter that is not related to any matter I handled while at Wolf, Wolf and Coyote?
Continue Reading December 15 Issue – Conflict with Former Client of Departed LawyerNovember 3 Issue – Former Client Conflict of In-House Lawyer
Q: Dear Ethics Lawyer, I am an associate general counsel in a corporate law department for Company A. Previously, I was a partner at a law firm in its corporate transactions practice group, advising and representing a number of clients, including one I will call Company B, about business contracts and sales and acquisitions of business units. Today, at one of our law department meetings, I learned that Company B is threatening to sue Company A, alleging that it has breached a contract that I drafted and negotiated for Company B a year before I went in-house. Is this a conflict issue for me? If so, is it an issue if someone else in the law department handles the matter?
Continue Reading November 3 Issue – Former Client Conflict of In-House LawyerOctober 1 Issue – General Commercial Transaction with Client
Q: Dear Ethics Lawyer, Our firm represents a well-respected private equity fund company. I am a products liability lawyer and have not personally done legal work for this client. The company is now raising capital for a new fund and I would like to invest by accepting the terms of their offering, but I am concerned with the requirements of Model Rule 1.8(a) that appear to be triggered whenever a lawyer enters into a business transaction with a client. Do these requirements apply even though I don’t personally represent the client? Do they apply even though I am simply investing under the terms of an offer made to the market in general, i.e., there would be no negotiation about it?
Continue Reading October 1 Issue – General Commercial Transaction with ClientSeptember 2 Issue – Conflicts from Joint Defense Arrangement
Q: Dear Ethics Lawyer, Our firm defended client X in a product liability suit in which other companies in the same industry were also defendants. The various defendants, including our client, entered into a written joint defense agreement and collaborated as a group on strategy, briefing and arguments in the matter. During discovery initiated by the plaintiff, we learned that our co-defendant Y had hired one of X’s engineers who had delivered to Y confidential and proprietary product designs of X, which Y had then used to improve its product. The product liability case has been settled, and now X would like our firm to pursue an action against Y and the former engineer for misappropriation of trade secrets and other claims relating to Y’s use of X’s intellectual property. We sent a demand letter to Y and its counsel responded, alleging that we have a conflict of interest because of our participation in the joint defense agreement with Y, and the relationship of product design at issue there to the similar issue that would be at issue in the new matter. Is this a problem for us?
Continue Reading September 2 Issue – Conflicts from Joint Defense ArrangementAugust 1 Issue – Insurance Defense Conflicts
Q: Dear Ethics Lawyer, A lawyer in our firm represents an insured as client pursuant to an arrangement with an insurance company under a policy that has a duty to defend the claim. Our firm has now been asked by another client to represent it adverse to the insurance company in a completely unrelated coverage dispute. May the firm do so without a waiver? What other ethical considerations apply?
Continue Reading August 1 Issue – Insurance Defense ConflictsMay 15 Issue – Withdrawal and the Hot Potato Doctrine
Q: Dear Ethics Lawyer, I have an opportunity to land a new corporate client that is very active in a number of practice areas (acquisitions, regulatory issues, litigation, etc.). This would be a game-changer for me and for our firm, generating millions and keeping many people busy.
Unfortunately, when I ran a conflict check, it appears that our firm is adverse to the prospective new client in a relatively small litigation matter for an existing client. The existing client has never generated more than $25,000 per year in revenue for the firm. Assuming the existing client would not be prejudiced by a change of counsel, can we simply help find that client new counsel, arrange an orderly transition at our expense, withdraw from the existing relationship to avoid a current client conflict, and then proceed to represent the new client on unrelated new matters?