Regulatory: Conflict management for inside counsel

Practical tips for a legal department’s conflict-checking system

The task of steering clear of conflicts with current and former clients grows more complicated as the list of current and former clients grows longer. Long client lists have forced law firms to focus on conflicts management for years. But the client lists of many corporate legal departments are growing too.  This growth is the result of growing legal departments—the addition of new lawyers leads to the addition of imported former clients that must be checked for conflicts purposes; growing corporate families; and the risk that courts will find implied attorney-client relationships between corporate counsel and corporate constituents. As its list of current and former clients grows, the corporate legal department will need to develop robust conflicts management systems and procedures as well.

Failure to properly address conflicts can lead to unhappy outcomes including bar discipline, disqualification, claims for malpractice and breach of fiduciary duty, loss of privilege and confidentiality, fee disgorgement, and generally unhappy clients. While outside counsel are at greater risk for some of these outcomes, in-house counsel are not immune from any of them.

Review the company’s website, intranet, policies and communications that might reflect whom the company has said its lawyers represent. You might be surprised what you find. You may find statements that the company’s lawyers represent a broad group of corporate constituents, when, on reflection, that isn’t intended or accurate.

Review regulatory, administrative and court filings to see whether the company or its lawyers have claimed to have represented any clients other than the corporation itself.

Contributing Author

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Jonathan Hughes

Jonathan Hughes is a partner in Arnold & Porter’s Attorney Liability and Litigation practice groups, where he focuses on representing law firms and lawyers in...

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