Casual Advice Can Be Binding

Virtually all attorneys know that the Rules of Professional Conduct prohibit certain conflicts of interest. Yet, almost daily, the legal media report large settlements or verdicts involving legal malpractice claims premised on conflicts of interest. Why is that?

The economic pressures of the modern legal practice have pushed many attorneys to accept engagements close to the line between permissible and impermissible conflicts of interest. Some law practices assume that, if the anticipated fee is large enough, the conflict must be resolvable. Unfortunately, when such representations turn sour, the law firm or its insurer typically faces a payment to the former client.

For most attorneys, conflict of interest claims arise from unexpected circumstances rather than from situations in which an attorney skirted, or attempted to avoid, the clear application of the rules addressing conflicts. Below are the three most common circumstances from which unexpected conflicts issues materialize.

Unexpected Attorney-Client Relationships

Effective practice management involves clearly articulated file-opening procedures that include both client intake and the resolution of potential conflicts of interest.1 The most effective practice procedures begin with the important step of properly identifying the client.

Contrary to popular belief, not every attorney-client relationship begins with a prospective client who walks in the door and asks an attorney for legal services. Instead, attorney-client relationships can be implied from the facts and circumstances surrounding a pattern of communication between an attorney and someone else.2

In today's Internet world, these kinds of implied representations are becoming more and more frequent. Often they begin with a legal question about a particular circumstance. Other times, they start with an actual solicitation for legal advice.

In many instances, these requests for legal services and responses arise in a casual conversation through an in-person social interaction or a website rather than through a formal engagement of legal services memorialized in an engagement letter or a fee agreement. Nonetheless, if the inquiry involves the seeking and rendition of legal advice, it can result in an attorney-client relationship—at least for purposes of the attorney-client privilege.3 That alone can give rise to a conflict of interest given the protected nature of confidential information received from a potential or actual client.4

One illustration of just how such an informal communication can sneak up on a law firm involved a communication from a friend of an...