What constitutes a conflict of interest?

According to reporting by Insurance Journal, conflicts of interest make up the majority of legal malpractice claims. Seven out of nine legal malpractice insurers listed conflicts of interests as the leading or second-highest cause of claims they've settled in the last year in an annual survey conducted by Ames & Gough, an insurance broker.

Because of how seriously both clients and the courts take such claims, even if they are in fact unsubstantiated, it's worth exploring what exactly a conflict of interest looks like.

The anatomy of conflicting interest

As with many legal malpractice claims, just because something appears to be a conflict of interest doesn't make it so. In general, a conflict of interest could arise if a lawyer's professional judgment would be impacted by:

  • His or her personal or financial interests
  • Responsibility to a current client with opposing interests in the case
  • Responsibility owed to a third party with opposing interests in the case

Practically speaking, just because an attorney and his or her client (or his or her opposing counsel) are friends doesn't mean there is a conflict of interest. However, it could present a problem if that friendship influences a lawyer's judgment, strategy or approach to the case such that the outcome would wildly differ had another, impartial lawyer represented the client.

How to analyze a conflict of interest

The gray area, of course, is analyzing to what extent those prior relationships or responsibilities interfere with a particular case. The following questions are often used to assess whether a conflict of interest exists:

  • Who is the client and what does their relationship with the lawyer entail?
  • Will the outcome materially affect the lawyer based on his or her relationship to the client?
  • Is the lawyer's representation of one client likely to adversely affect or interfere with his or her representation of a different client (past or present)?
  • Is the lawyer's judgment unduly influenced by a third party, especially as it relates to the payment of attorneys' fees?

The answers to these questions will help determine whether or not a conflict of interest exists. Some lawyers are good at answering these questions for themselves. For those who become the targets of a legal complaint or lawsuit, however, experienced counsel may be necessary to protect their rights, their practice and ultimately, their reputation.

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