Legal Conflict of Interest Defined

In some relationships, individuals or the public place their trust in someone who acts in their best interest. When a person has the responsibility to represent another person, whether as an administrator, attorney, executor, public servant or trustee, a conflict between professional obligations and private interests arises when the person attempts to discharge that duty while trying to obtain personal gain. The appearance of a conflict of interest exists when a person`s private interests may conflict with his or her fiduciary duties, such as when a client asks his or her lawyer to bring an action against a corporation in which the lawyer is the majority shareholder. An organizational conflict of interest (OCI) may exist in the same manner as described above, e.g. when a company provides two types of services to government and these services conflict with each other (e.g., manufacturing parts and then participating in a selection committee comparing parts manufacturers). [72] Businesses may develop simple or complex systems to mitigate the risk or perceived risk of a conflict of interest. These risks may be assessed by a government agency (e.g., as part of a U.S. government tender) to determine whether the risks give the organization a significant advantage over its competitors or reduce the overall competitiveness of the bidding process. [73] [6] Loyalty to a current client prohibits taking over a representation that is directly prejudicial to that client without the client`s informed consent. Therefore, without consent, a lawyer cannot act as counsel in a case against a person he represents in another case, even if the cases are completely independent of each other.

The client for whom the representation is directly detrimental is likely to feel betrayed and the resulting damage to the client-lawyer relationship is likely to affect the lawyer`s ability to effectively represent the client. In addition, the client on whose behalf the opposing representation is reasonably made may fear that the lawyer will pursue that client`s case less effectively for the sake of the other client, i.e., the representation may be significantly limited by the lawyer`s interest in retaining the current client. Similarly, a directly adverse conflict may arise when a lawyer has to cross-examine a client who is a witness in a dispute involving another client, as if the testimony were prejudicial to the client represented in the application. On the other hand, simultaneous representation of clients whose interests are not economically disadvantageous, such as representation of competing commercial enterprises in independent disputes, generally does not constitute a conflict of interest and therefore may not require the consent of the respective clients. [19] In some circumstances, it may not be possible to make the disclosure required to obtain consent. For example, if the lawyer represents different clients in related matters and one client refuses to consent to the disclosure required for the other client to make an informed decision, the lawyer cannot properly seek their consent. In some cases, the alternative to joint representation may be that each party must obtain separate representation, which may result in additional costs. These costs, as well as the benefits of obtaining separate representation, are factors that may be considered by the client concerned in determining whether joint representation is in the client`s best interest. [35] A lawyer for a company or other organization who is also a member of the board of directors should consider whether the responsibilities of the two roles may conflict with each other. The lawyer may be called upon to advise the Corporation on matters concerning the actions of directors.

Consideration should be given to the frequency with which such situations may occur, the potential intensity of the conflict, the impact of the lawyer`s resignation from the board of directors, and the possibility that the company may seek legal advice from another lawyer in such situations. If there is a significant risk that the dual role will compromise the lawyer`s independence from professional judgment, the lawyer should not act as a director or cease to act as counsel to the firm in the event of a conflict of interest. The lawyer must draw the attention of other board members to the fact that, in certain circumstances, matters discussed at board meetings while the lawyer is present in his or her capacity as a director may not be protected by solicitor-client privilege and that conflicts of interest may require the lawyer to be rejected as a director or require the lawyer and law firm to represent the corporation in a matter. Reject. To be conservative, suppose we only attribute the 23.5% increase from 1986 to 1999 to the recent average of 32.6% to government actions subject to conflicts of interest caused by the $1.7 billion in campaign contributions. That`s 9% of the $3 trillion in profits reported by the financial industry during that period, or $270 billion. This equates to a return of over $50 for every dollar invested in political campaigning and lobbying for this industry. (That $270 billion is equivalent to nearly $1,000 for every man, woman, and child in the United States.) Almost no other place outside of politics with such a high return on investment in such a short time. [ref. needed] Third-party reviews may also be used as evidence that transactions were indeed fair (“market practice”).