Monday, September 12, 2016

On Conflicts: The "It’s Just Business" Update



It's time for business. The ABA/BNA Lawyers’ Manual on Professional Conduct reports: "Market Rivalry Isn't ‘Materially Adverse' Conflict"
  • "Lawyers aren't precluded from accepting a litigation matter just because the new client and a former client have generally competing economic interests, the New York state bar's ethics committee advised July 15 (New York State Bar Ass'n Comm. on Prof'l Ethics, Op. 1103, 7/15/16)."
  • "An attorney who previously represented a corporation can handle a new client's suit against another company, even though the former client and the new client are marketplace rivals and it would be in the former client's interest for the new client to lose the suit, the committee advised."
  • "The opinion addresses a conflicts question on which there's scant authority—that is, whether it's 'materially adverse' under the rule on former-client conflicts to handle litigation against a third party when the outcome would economically help a former client's competitor. The committee said no. General economic adversity poses neither a current-client conflict nor a former-client conflict, it advised."
  • "Because a lawyer may simultaneously represent current clients who are economic competitors, it follows even more so that a lawyer may subsequently represent a client whose economic interests are contrary those of a former client, the committee said."
  • "The committee said that Rule 1.9(a) would prohibit the attorney from defending current client B in the lawsuit brought by former client A if the current representation is substantially related to the former representation of A. This is because the “materially adverse” prong of Rule 1.9 is always met when a former client is on the opposite side of a lawsuit involving a substantially related matter, it said."

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