Conflicts of interest between current clients is an issue that warrants the constant attention of lawyers. The California Rules of Professional Conduct (CRPC) require the lawyer to obtain informed written consent from both clients if the lawyer is representing a client in a matter and is also representing another client in the same or separate matter where the clients’ interests are adverse to each other (CRPC 1.7(a)), or if there is significant risk the lawyer’s representation of the client will be materially limited by the lawyer’s responsibilities to or relationships with another client, former client or third party (CRPC 1.7(b)).  A conflict of interest is generally imputed to all lawyers within the law firm (see CRPC 1.10). However, consent can only be sought if the lawyer also reasonably believes that competent and diligent representation can be provided to each client; the representation is not prohibited by law; and the representation does not involve the assertion of a claim by one client against the other in the same litigation or proceeding before a tribunal. CRPC 1.7(d)

Lawyers must be diligent in obtaining the informed written consent of both clients. To obtain the clients’ informed written consent, lawyers should take the time to thoroughly describe the scope of the representation, the risks of conflicts of interest and the consequences if the interests become adverse to the point that the lawyers can no longer provide “competent and diligent representation to each affected client.” (See CRPC 1.7(c)(2).) The validity of the written consents may be called into question if the nature of the current issues were not described in the scope of the representation. One such risk is that if the lawyer becomes unable to competently represent one client without disclosing confidential information of the other client, the lawyer may be forced to withdraw from the representation in accordance with CRPC 1.16. This type of conflict of interest could occur when different attorneys at the same law firm represent different clients in the same matter.  

Further, if the scope of the representation materially changes or the original conflict of interest letter did not contemplate the current issues, the lawyer(s) should determine if the representation can continue and still adhere to the CRPC. If the lawyer(s) believe competent representation of the clients can continue, notwithstanding the new issues, then the lawyer(s) may need to once again obtain the informed written consent of each client by explaining in detail the revised scope of the representation and the foreseeable consequences to the clients. CRPC 1.7, Comment [10].  At this point, a prudent attorney may suggest that each client consult independent counsel regarding their consent to this new potential conflict. CRPC 1.7, Comment [9]. A client may not want to incur the additional legal fees to have another attorney review this new development. Therefore, a thorough discussion of the conflict of interest and the consequences of continued representation are imperative to ensure effective informed consent. 

Dianne Jackson McLean is a partner at the law firm of Goldfarb & Lipman LLP, where she is a transactional attorney, representing public housing authorities, cities, and other government agencies in complex mixed finance affordable housing transactions and economic development matters.  Ms. Jackson McLean also provides advice to her firm on ethics.  Ms. Jackson McLean is the chair of the BASF Legal Ethics Committee.