The always excellent IP ethics and insights blog brought us its own Halloween themed, two part series on waivers (including a no-holds-barred approach to clip art), starting with: "Advanced Conflict Of Interest Waivers: Tricks Or Treats?" --
- "Indeed, in large law firms that typically employ hundreds of lawyers in multiple offices around the globe, it is commonplace for their standard engagement agreements to include language in which the client agrees as part of the representation to waive in advance future conflicts of interest."
- "But are such “advanced waivers” ethical? It is one of the most vexing questions that has dogged law firms, regulators, and ethics counsel for years. The question raises two competing schools of thought."
- "On the one hand, the ethics rules require “informed consent” for a conflict waiver. The idea that a client can give an “advanced” waiver of a conflict is anathema to this fundamental requirement. How can a client be “informed” enough to give consent when they have no idea of the facts and circumstances giving rise to a conflict that has yet to arise? Some authorities consider advanced conflict waivers to be unenforceable and in violation of public policy."
- "The opposite school of thought treats advanced waivers based on freedom of contract principles. A client desires to hire a law firm. The client will do anything—including agreeing to an advanced waiver—as part of the price for retaining the firm’s services. The client is free not to accept the provision and hire a different law firm. But if they accept the advanced waiver, has not the client agreed to assume the risk of a future conflict? And if the client chooses to accept the advanced waiver, why shouldn’t the law firm be entitled to rely upon the client’s agreement?"
- "For lawyers who want a clear, definitive, black and white answer to the question of the legality and enforceability of advanced conflict waivers, unfortunately there is none. Ethics opinions and court rulings have created a patchwork of opinions. This lack of uniform treatment of advanced conflict waiver leads to unpredictability—the type of “trick” that most lawyers would rather avoid."
- "Guessing incorrectly as to whether a court will uphold an advanced waiver may lead to unexpected, unfair, and even disastrous results for a law firm."
And with that, we hope to close the book on all scary developments this particular season...