Conflict of Interest – Client with the Firm

Conflict of interest is a dangerous game for lawyers. Some have systems to identify this possible issue before instructions are even accepted. Others rely on ad hoc methods that may or may not be effective. One area that is not commonly addressed is conflict between the firms interest and the clients. That most often arises in complex matters and typically matters where the firm has helped create legal structures that come under scrutiny. As the authors of the structure law firms frequently take up the cudgels when such structures come under attack. Possibly understandable given the intimate knowledge of the structure. However that same knowledge has to introduce a bias by default. The client and the firm are better served by an independent law firm being instructed. Too often though the pressure on lawyers to keep clients, to produce fees and to never admit a mistake (or the possibility of a mistake) means files are activated when the more prudent course is to refuse to act. This scenario should be at front of mind when such circumstances arise. That applies particularly to the lawyers but no less so to the clients, after all it is the clients that have most to lose, initially anyway. Long term the lawyers are the ones putting careers, livelihoods and reputation on line.

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