Waiving Conflicts of Interest
Zacharias, Fred C., The Yale Law Journal
This Essay explores the issue of when multiple clients may consent to concurrent representation by a single lawyer.(1) Most American jurisdictions evaluate client consent according to rules formulated by the American Bar Association.(2) The rules allow clients to waive their lawyers' conflicts of interest but impose significant limitations on that right.(3) This Essay concludes that the prevailing consent model is fundamentally flawed.(4)
In order to highlight problems with the ABA approach, this Essay focuses on the primary alternative: California Rule of Professional Conduct 3-310.(5) Like other American jurisdictions, California forbids lawyers to represent clients whose interests conflict, or potentially conflict, with the interests of another current client, a former client, or the lawyer(6) herself.(7) But unlike the other states, California's conflicts provision gives potentially prejudiced clients an absolute right to waive a conflict.(8) The viability of this provision has been questioned even in California. At least one appellate court has suggested that, despite the Code's absolute language, some conflicts of interests are nonwaivable.(9)
California's rule and the judicial response raise important questions about the proper role of consent in conflict-of-interest situations. Consider this example:
Two criminal codefendants, one an alleged drug kingpin and the other a lieutenant in his organization, retain the organization's regular lawyer to represent them. They consent to joint representation after being informed of the potential for conflicting interests.(10)
Or, consider this common illustration from a transactional setting:
A commercial real estate developer agrees to buy a parcel of land The developer retains an attorney to represent it and the seller of the property. Both clients are informed of the potential conflict of interest. The seller agrees to the multiple representation because the transaction seems straightforward and the developer has agreed to pay the cost of the representation.(11)
Should such clients be able to waive lawyer conflicts? When, if ever, should the clients' waivers be overridden? Why, for example, do the California courts foresee a need to find exceptions to California's unambiguous waiver rule?
The following pages analyze these issues. Part I contrasts the conflicts provisions in the California Code with those in the ABA Model Rules. Part II considers the masons why regulators sometimes allow clients to waive the regulatory protections. Part III identifies the reasons why courts typically reserve the power to void client consent if the regulators have not done so.
The Essay then attempts to draw from California's experience. Part IV describes and evaluates the judicial effort to modify California's absolute waiver provision. Part V concludes that California's conflict-of-interest rule focuses insufficiently on the contradictory purposes that conflict regulation serves. The analysis, however, suggests that the ABA alternatives are equally flawed. Part VI therefore offers a new codification of principles regarding waiver of conflicts among concurrent clients that would accomplish the goals of conflicts-of-interest regulation more effectively.
I. THE CONFLICT-OF-INTEREST RULES
The Model Rules contain two rules governing conflicts of interest among current clients. Model Rule 1.7(a) provides in pertinent part:
A lawyer shall not represent a client if the representation of that client will be directly adverse to another client....(12)
Model Rule 1.7(b) provides:
A lawyer shall not represent a client if the representation of that client may be materially limited by the lawyer's responsibilities to another client....(13)
The California Rules of Professional Conduct, though worded differently, contain similar proscriptions against conflicted representation:
A member shall not. …