Monday, May 14, 2012

Conflicts & Malpractice: When Law Firms Represent Themselves

Interesting article in The Recorder: "Viewpoint: When a Lawyer Needs a Lawyer." Richard Zitrin, professor at UC-Hastings and of counsel at Carlson, Calladine & Peterson explores the question: "What happens when a lawyer may have committed malpractice? May the offending lawyer confidentially consult internally within in his or her firm with— the "loss prevention" partner, the ethics committee, or the managing partner — and may those others then consult confidentially about the situation among themselves?"
  • "This California rule makes simple common sense. After all, if a law firm starts giving advice to client No. 1 that is adverse to ongoing client No. 2, the conflict of interest is self-evident. When the advice relates to the exact same facts for both clients, the problem is even more obvious. Viewed in this context, the argument that somehow if the law firm itself is client No. 1 those consultations magically remain confidential and privileged strains credulity, especially considering that these consultations are designed to protect the firm against its existing client's claim. Not surprisingly, the majority of the existing decisional law strongly supports this view, including two recent federal cases in Massachusetts, two more in Pennsylvania, and elsewhere, including Louisiana and Washington State."
  • "But this common-sense view is not unanimous. Recent cases in Ohio and Illinois both hold that on the specific facts presented, a law firm is not required to disclose its internal communications about loss prevention even if it was still representing the client asserting the claim. The Illinois case, while acknowledging that the law firm violated its fiduciary duty to its client, noted somewhat counterintuitively that the fiduciary violation does not create an exception to the privilege under current Illinois law. Notably, however, neither case analyzed the law firm's ongoing duty during the "dual representation" to candidly communicate with its third-party client, including about its own malpractice, an issue the California courts wisely recognize."
See the complete article for addtional detail.

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