Also known as: impermissible conflicts of interest · conflict of interest
Written by attorneys · grounded in primary & secondary sources — see below
A concurrent conflict of interest that prevents a lawyer from representing a client or a fiduciary from engaging in a transaction. The conflict exists when representation of one client will be directly adverse to another or when there is a significant risk that representation or performance of duties will be materially limited by responsibilities to another client, former client, or third person or by a personal interest.
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Ibrahim Iqbal retained counsel to sue Ironclad Industries for breach of contract. The same lawyer simultaneously agreed to defend Ironclad in an unrelated regulatory proceeding brought by a state agency. The lawyer must withdraw from both matters because the representations are directly adverse.
After Ellen died, the court appointed Mark as personal representative of her securities portfolio. Without court approval or beneficiary consent, Mark transferred the entire portfolio to accounts managed by his own firm and locked in substantial advisory fees. Any interested heir may void the transaction because it created a substantial conflict of interest.
Interlink Communications hired a law firm to handle a licensing dispute. The same firm filed suit against Interlink in a separate intellectual-property matter on behalf of another client. The firm cannot proceed with the suit because simultaneous representation and opposition of the same client is a per se conflict.
Igor Ito asked his lawyer to represent both him and his business partner in negotiating the sale of their joint venture. The lawyer reasonably believed she could provide competent representation to each, but the sale terms created direct adversity between the two clients. Informed consent did not permit the representation because the conflict remained impermissible under the rules.
A federal judge served as trustee of a university that was actively negotiating a major contract with a litigant whose case was pending before him. The judge did not recuse himself. The judgment must be vacated because the objective appearance of a conflict undermined public confidence in the judiciary.
A state judge continued to acquire municipal bonds issued by a city that was a defendant in pending litigation before him. The judge did not participate in the particular decision affecting the bonds. Judicial discipline is still appropriate because the ongoing financial dealings created an appearance of impropriety and potential conflict.
A lawyer may not represent a client if the representation involves a concurrent conflict of interest. Such a conflict exists when the representation of one client will be directly adverse to another client or when there is a significant risk that the representation of one or more clients will be materially limited by the lawyer's responsibilities to another client, a former client, or a third person or by a personal interest of the lawyer.
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A transaction affected by a substantial conflict of interest on the part of the personal representative is voidable by any interested person unless the will or a contract entered into by the decedent expressly authorized the transaction or the transaction is approved by the court after notice to interested persons.
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No. A law firm may not simultaneously represent one client in one matter and oppose that same client in another matter even if the matters are unrelated and handled by different offices of the firm. Such directly adverse concurrent representation constitutes a per se conflict of interest and is presumptively improper absent informed consent.
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A lawyer may represent a client notwithstanding a concurrent conflict if the lawyer reasonably believes competent and diligent representation can be provided to each affected client, the representation is not prohibited by law, and each affected client gives informed consent confirmed in writing.
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A federal judge's failure to recuse under 28 U.S.C. §455(a) where the judge should have known of a conflict can warrant vacatur of the judgment. The statute creates an objective standard, and post hoc discovery of disqualifying interests requires remand or reversal where the violation is neither harmless nor trivial.
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Judicial discipline may be imposed where a judge owns or continues to acquire municipal bonds or notes in a city that is a party in litigation pending before the judge. Such financial dealings create an appearance of impropriety and potential conflict of interest even if the judge did not actually participate in the particular decision.
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