Ethics in Brief

Ethics in Brief is designed to present ethical issues that practitioners might well face on a daily basis. It is a service of the Legal Ethics Committee of the San Diego County Bar Association.


Double Trouble? No, Just Some Caveats.

They come in pairs. A young couple who want an estate plan; two women who need a partnership formed; the employer who wants you to represent it and the accused supervisor/co-defendant; the non-party executive whose deposition is scheduled when you already represent the defendant company; two former employees who want to sue their former employer. All promising pieces of business.

But whenever you have two people sitting in your office, on the phone, identified on the email—no matter how seemingly allied their interests—think conflict of interest. At least potentially. That brings us to the joint representation or conflict of interest waiver letter.

Rule of Professional Conduct 3-310

Rule of Professional Conduct 3-310(C)(1) mandates that when the interests of two clients or more conflict, even potentially, we need the informed written consent of each before we can begin or continue the representation. The written part is obvious; but informed? It means telling each the actual and reasonably foreseeable adverse consequences to each of having the same lawyer represent them.

Scare Away Business?

Won’t that just scare them out the door? Not if done right. If the lawyer says: “I really want to help you both. I know I can. But my duty to each of you, and basic fairness, requires me to tell you some consequences of a joint representation. I want you to make the best decision for you.” Likely outcome? Both will appreciate your honesty and trust you more.

How Informed?

Importantly, the lawyer should tell each potential client that anything one client tells the lawyer, the lawyer is free to tell the other client; that if one client has information relevant to the representation that client does not want the lawyer to tell to the other joint client, obviously the lawyer must keep that information confidential; that but then the lawyer would have to determine whether the lawyer could continue to represent both clients, only one or neither. If the lawyer should elect to continue representing one client, the other acknowledges at the outset that she or he must obtain independent counsel.

In addition, the lawyer should also tell each potential client that Evidence Code section 962 provides that in any dispute between them arising out of the joint representation, no attorney-client privilege exists for anything they disclosed to the lawyer during the joint representation.

Some Particulars

For the young couple seeking an estate plan, consider discussing that, while they have common goals now, as time goes on and assets grow, they have children, or their parents age, their ideas may change. They may wish to alter their estate goals—and disagree fundamentally about how to do it. Untangling an existing estate plan could be cumbersome, even costly. At that point, they may have to retain separate counsel if they cannot reconcile differences.

The two new partners? First, who’s the client? One; both; the partnership-to-be; all three? Will there be employment agreements; buy-sell agreements; successor issues? Have they thought all this through—the lawyer cannot negotiate on behalf of one against the other.

In the employment lawsuit, you’re asked to represent your client, the company, and also the alleged harassing supervisor. “George would never do such a thing!” Make sure the supervisor knows that, if the facts change and an actual conflict develops, the lawyer will continue to represent the company and the supervisor will have to obtain independent counsel.

That non-party executive at the deposition? If you want adequately to prepare the executive for the deposition, then you have joint clients—however briefly—and need a conflict of interest waiver. Otherwise, you had better make sure from the first meeting that the executive fully understands that you do not, in fact, represent the executive; that there is no attorney-client privilege for any communication between you; that you represent solely the company’s interests.

Joint plaintiffs? Obviously, they have a common goal: win. But differences in strategy can—likely will—arise: conflicting instructions on how to proceed; whether to settle or fight; sue individuals or just the employer. If the employer offers a lump-sum settlement, how will they divide it? All potential conflicts that the conflict waiver letter should disclose.

Potential Becomes Actual?

If a potential conflict becomes actual, we have to get informed written consent of each client to continue the representation. (Rule 3-310(C)(2).)

And so, when George confides—“in strictest confidence, you understand”—that he did some of the things the plaintiff alleges, the potential conflict just became actual—in at least two respects. The employer may have a claim against the supervisor. More importantly, because the lawyer must keep confidential forever the information George just disclosed “in strictest confidence”—Rule 3-100 and Business and Professions Code section 6068, subdivision (e)(1)—the lawyer must determine whether the lawyer can continue to represent both without informing the employer what the lawyer has just learned.  If not, then the lawyer has an irreconcilable conflict and must withdraw from representing George.

A properly crafted joint representation agreement, however, should allow the lawyer to continue representing the employer, unless the lawyer determines that the information is so critical to the representation that the lawyer cannot continue to represent the employer without disclosing this new information. At that point, unfortunately, the lawyer must withdraw from representing both.

Conclusion

Whenever there are two potential clients, likely a potential conflict of interest lurks, triggering the need for a conflict waiver. But we don’t have to look on this as a threat, or even a chore. Rather, think of it as an opportunity to show each client that you have that client’s individual interest at heart; that you want the client to decide what works best for the client. It also helps avoid the “if-you-had-only-told-me” backbiting should something go amiss later. You have in hand the client’s written informed consent to the joint representation.

-- Edward McIntyre