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On the Virtues of
Written Conflict of Interest Waivers
Alvin Mathews
Spring 2007
The Proponent of the Written Conflict of Interest Waiver
E.A. Farnsworth is a prominent lawyer in Capital, Ohio, known for the ironclad agreements he drafts for his clients. With his precision, no stone is left unturned. Also a member of the Capital Bar Association (CBA), Farnsworth serves on the local professional ethics committee, handling investigation of grievances that allege lawyer misconduct, such as conflicts of interest. Earlier in his ethics committee service, he became frustrated with lawyers who had failed to confirm significant client communications in writing, leading to client grievances against them. When the state’s Supreme Court decided to adopt its version of the American Bar Association Model Rules of Professional Conduct, Farnsworth immediately recommended to the Supreme Court’s Rules Commission that it include mandatory written conflict of interest waivers in the new court rules.
Farnsworth’s service on the CBA Professional Ethics Committee opened his eyes to the problems caused by verbal conflict of interest waivers. Too many consumers of legal services, Farnsworth realized, have difficulty understanding why their lawyer or law firm has a conflict of interest and how the material limitation posed by the conflict will actually impact the representation. Thus, Farnsworth strongly believes that, like verbal commercial agreements between business entities, oral conflict of interest waivers leave a great deal of room for misunderstanding and dispute between the parties, especially when the client-lawyer relationship is strained by a bad outcome in the transaction or litigation on which the legal representation is based.
Pleased that the Supreme Court adopted mandatory written conflicts of interest waivers, Farnsworth knows that careful lawyers who have used them in the past will continue to use them and will enhance their clarity to ensure that their clients are always fully informed. He remains concerned, however, that many lawyers will not abide by the rule. To remind local lawyers of this requirement to provide a written confirmation of the informed consent to the conflict of interest, Farnsworth decided to write an article in the local bar association journal.
Waivable or Non-waivable Conflicts
Permitting clients to waive conflicts of interest on the part of their lawyers is an alternative to
routine lawyer disqualification from representing a client on a matter that has been recognized for a
century1. State lawyer conduct regulations prohibit a
conflict of interest waiver that would propose a lawyer taking adverse positions against two of
his or her firm’s clients in the same matter. Such regulations normally permit, however,
waivers of other conflicts of interest such as those in which a lawyer opposes his or her own client
in a matter where that client is represented by a different law firm2.
Similarly, lawyers may obtain conflicts of interest waivers on those matters in which a lawyer’s
personal interests, or his or her responsibilities to another client, might adversely affect the
representation3.
Under Ohio Rule of Professional Conduct 1.7, a lawyer can seek permission from the
client to undertake the representation if (1) the lawyer or law firm can provide competent
and diligent representation of the affected client, (2) the client gives informed consent
confirmed in writing, and (3) the conflict is otherwise waivable4. Additionally,
a conflict of interest involving a lawyer’s former client, which arises only if the new matter is the same as or
substantially related to the earlier one, also may be waived5.
Ohio’s Standard for Sufficiency of Waivers:
Informed Consent Confirmed in Writing
A waiver of a conflict of interest is sufficient if there has been proper disclosure of the
existence and nature of the possible conflict and the possible consequences of the representation6.
This proper disclosure of the conflict is referred to as informed consent, which “denotes the
agreement by a person to a proposed course of conduct after the lawyer has communicated adequate
information and explanation about the material risks of and reasonably available alternatives
to the proposed course of conduct7.” In other words, the client’s informed consent must follow the
lawyer’s imparting of information reasonably sufficient to permit the client to appreciate the
significance of the conflict of interest. This includes a clear explanation of the differing
interests involved and the advantages of, in some cases, seeking independent legal advice.
It also includes a detailed explanation of the risks and disadvantages entailed in the conflict of interest waiver.
The client’s waiver of the conflict of interest must be confirmed in
writing, which in this context denotes “informed consent that is given in writing by the
person or a writing that a lawyer promptly transmits to the person confirming an oral informed
consent8.”
Finally, “writing” means “a tangible or electronic record of a communication or representation,
including handwriting, typewriting, printing, Photostatting, photography, audio or video recording and
e-mail9.”
In sum, lawyer ethics rules require that a client who is asked to waive an actual or potential conflict have an adequate appreciation of what protection the client is giving up by permitting the lawyer or law firm to proceed with representing the client despite the existence of a conflict. Even more explanation of the conflict of interest and its ramifications may be required where the client is unsophisticated. .
Footnotes
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