Conflict Check Basics: What Every Legal Professional Should Know
There are many instances when a lawyer can run into a conflict of interest with a prospective new client, and some may not be easily identified before the retainer agreement is signed. Here are a few potential conflicts of interest that can result in serious ethical issues for attorneys:
- Representing two clients with opposing interests
- Representing a client when you have conflicted responsibilities to a current or former client or third party
- Representing a party when you represented an opposing party related to the same case at a former firm
- Dropping representation of a client and then representing the opposing party in the same matter
Most lawyers have multiple clients, and many will work in more than one firm throughout their careers. These circumstances dramatically increase the possibility of conflicts of interest between former and new clients. Sharing client lists with new employers to check for conflicts has long been an accepted part of transitioning from one law firm or legal department to another. However, the ethical implications of failing to disclose or catch potential conflicts during a conflict check cannot be overstated.
What is a Conflict Check?
Attorneys have a fiduciary duty that prevents them from representing someone whose interests directly conflict with those of a client they currently represent. To do so constitutes a conflict of interest that could lead to disqualification from representation or malpractice claims.
Law firms typically run conflict checks when the attorney-client relationship begins by checking a potential client against a list of current and former client names. However, to go beyond the minimum when pinpointing conflicts, a conflict checking system needs to capture as much information as possible, including:
- Client name
- Matter number
- Case name and number
- Insurers and insureds
- Opposing counsel and co-counsel
- Case status – open or closed
It’s critical to collect this information and perform a conflict check before conducting extensive discussions with a potential client because these discussions might reveal case details before an attorney realizes they already represent someone with adverse interests. When a potential conflict is identified, the ABA’s Model Rules of Professional Conduct provides guidance regarding whether the conflict is actual or potential and whether the attorney must decline representation, or a waiver might be an option.
Leveraging Practice Management Software for Conflict Checks
While some legal professionals continue to rely on index cards, spreadsheets, or paper forms when conducting conflict checks, this manual process is time-consuming, non-billable, prone to human error, and fraught with delays. End-to-end practice management software with sophisticated search capabilities can facilitate a more seamless process, allowing legal teams to identify potential conflicts faster and more accurately.
The best conflict checking system is constantly updated with new information from each case, integrated with other office systems such as time recording, billing, and case management, and used by all members of the firm. Here is why it’s easier (and more efficient) for legal professionals to do a conflict check when everything is under one system:
- Efficiency. A traditional conflict check manually searches a firm’s vast client database and lists of vendors and other parties. In contrast, using a robust practice management application allows users to review all the necessary data sources more quickly, significantly reducing the time required to perform due diligence.
- Review. When potential conflicts of interest are identified, they need to be analyzed to determine whether they pose a serious concern. A complete practice management platform can immediately highlight potential conflicts and allow you to dig in for additional details before they are presented for clearance.
- Risk management. Modern practice management systems accelerate the entire conflict review process by enabling users to rapidly locate possible exposures to conflict of interest to help boost a firm’s profitability while simultaneously lowering its exposure to regulatory risk.
By leveraging a practice management application with matter management and complete billing and accounting, your firm has the depth of analysis needed to ensure the absence of conflicts at all levels.
Checking for Conflicts – Before It’s Too Late
One of the worst things that can happen when a lawyer messes up a conflict check is that knowledge of the conflict comes too late – after representation has begun. At that point, the client might agree to sign a waiver to continue the representation, or another attorney (or another firm) will need to take over the case. Neither is ideal and both can result in preventable delays and reputational damage.
Zola Suite can help you root out conflicts, allowing lawyers to avoid wasted time, the appearance of impropriety, unfavorable online reviews, and unnecessary headaches.