(While this post is geared towards a firm of more than one attorney, there are some points every solo should take note of.)

What happens in your firm if there is a hit on a conflict search? Hopefully the conflict concern is immediately brought to the attention of the intake attorney. In firms that routinely and systematically check for conflicts, this does occur.

The interesting question however is this, is that action in and of itself sufficient?

I would suggest that it is not, at least some of the time and here’s why. An identified conflict will occasionally put the intake attorney in a precarious situation. Sometimes there will simply be no bright line rule upon which to draw when trying to decide whether it is permissible to move forward or not. Combine with this the possibility of a significant legal fee if the decision is made to move forward and the dilemma becomes clear.

When faced with a potentially serious conflict and couple that with a potentially significant legal fee, well let’s just acknowledge that reasonable minds may not always make the most responsible decision. Personal desires and financial pressures can sometimes cloud one’s thinking. Because of this reality, leaving all conflict resolution decisions entirely up to every intake attorney’s discretion can result in real exposure for the law firm. I actually have worked with firms that were surprised to learn that a significant conflict concern arose and the intake attorney moved forward on his own when he should not have and the fallout was not good. In those situations there was no accountability to the firm for conflict resolution. There ought to be, and fortunately, there is a better way.

If the conflict hit is such that it is not immediately apparent that the firm is conflicted out, the conflict concern should be brought to the attention not only of the intake attorney but the partner or departmental chair responsible for conflict resolution as well. The vast majority of conflict hits will result in a relatively quick sign-off as the intake attorney can readily explain why the name match is not going to be a concern. For those situations that are not clear, it is essential to have a non-involved attorney who is a trusted member of the firm act as the conflicts resolution attorney. Not only will the conflicts resolution attorney be able to counsel the intake attorney, she will also be able to make the ultimate conflict decision on behalf of the firm if that becomes necessary. Given this, the conflict resolution attorney should be a senior member of the firm who can rise above concerns over immediate cash flow and examine the proffered representation in light of what the ultimate benefit to or concerns for the firm may be.

In some instances, seeking the advice of ethics counsel may even be warranted. Some firms have an in-house ethics counsel which makes this rather easy. If your firm doesn’t or you’re a solo practitioner, you may need to seek outside advice. Consider placing a call to a law school ethics professor, bar counsel, a malpractice defense practitioner, a bar related or insurance carrier’s risk manager, or even another trusted colleague. In addition a review of the applicable rules of professional conduct and commentary will often provide further clarification.

Even after hearing the above, I will still occasionally have attorneys try to argue that the overall risk doesn’t justify such an effort. To them I would say this. Have you considered the exposure issues that may come into play in a conflict of interest malpractice claim? The end result of some conflict claims is that the firm must disgorge its fee because you cannot profit from a matter that you should never have been involved in in the first place. Oh, and remember this, malpractice insurance policies do not cover disgorgement of fees and, as we’ve been discussing, sometimes the fees in question are substantial. Ouch.

Even more troublesome is the issue of notice to a malpractice insurance carrier. Conflict of interest claims do not arise overnight. Attorneys are often aware of a potential problem when clients are troubled by how their matter is progressing. If one or more insurance reapplication periods pass during the time of client discontent or if coverage is placed with a different carrier in the interim, the insurance carrier may deny coverage. Why? From the carrier’s perspective, the firm was aware of an act, error or omission that could reasonably have been expected to be the basis of a claim or suit that was not reported in a timely fashion under the terms of the policy. Read your malpractice insurance policy carefully and pay particular attention to the notice requirements. Conflict claims do get denied for this very reason. When a firm was aware of a conflict and made the decision to put their financial interests above the interests of their clients and charged ahead anyway, well carriers (and juries) have little tolerance for this especially after learning about it a year or two later.

I strongly believe that the practice of law is a profession. But the running of a law practice is a business, and businesses need to have built-in accountability procedures.  When you stop to think about it in this light, doesn’t the above approach just make good sense? I certainly think so.