August 2018

Conflicts of Interest in The Project Based Attorney Model

All practicing lawyers are familiar with rules prohibiting them from representing a client in a matter that would create a conflict of interest. Law offices and attorneys run conflicts checks to maintain appropriate client relations. Questions may arise, however, regarding whether a project-based lawyer hired for a specific project create conflict issues for the law firms hiring them. There are two main issues to address: (1) conflicts between project-based lawyers and the matter they are hired for; (2) imputing a project-based lawyers conflicts to the firm hiring them.

The Model Rules define conflicts of interests with current clients and former clients, as well as imputed conflicts of interest. Conflicts arising with current and former clients are easy enough to understand in the context of project-based lawyers hired by a law firm. Firms should use their standard procedures for handling conflicts if the project-based lawyers are currently engaged to assist with the client’s matter. This requirement will differ from state to state, and law firm to law firm. A guiding principle for all situations, however, should be to inform and receive consent from clients any time there might be a conflict of interest disallowed under your jurisdictions ethics rules.

Also, while most states only require that clients be informed of conflicts in writing, some jurisdictions like Wisconsin and Wyoming, require that consent be evidenced in writing and signed.

With respect to “imputed” conflicts, the rules are primarily concerned with whether a lawyer is “associated with” a law firm when determining whether conflicts rules apply to lawyers who are not partners or associates of a firm. An example of a lawyer associated in a firm in a traditional setting is a lawyer who is “of counsel” at a firm and has an office in the same building as that firm. This lawyer would be said to have a close enough relationship with the firm to be considered “associated” with the firm.

Lawyers hired on a project basis however are generally not considered to be associated with the hiring firm for conflicts of interest purposes. Courts repeatedly define “associated” as a much closer, regular and personal connection between the associated lawyer and the firm than project-based lawyers will likely ever achieve.

Texas rules present a good example. Texas does not adopt Model Rule 1.10 – Imputation of Conflicts of Interest. Instead, they formed a general conflicts of interest rule which includes reference to imputed conflicts. Under Texas Rule 1.06 – Conflicts of Interest General Rule, “If a lawyer would be prohibited by this Rule from engaging in particular conduct, no other lawyer while a member or associated with that lawyer's firm may engage in that conduct.” However, even under this general rule, “associated with” does not take on a broader definition than in any other jurisdiction. Conflicts are not imputed to the law firm as a whole unless the close "of counsel" relationship is present, or the lawyer is an employee at the firm.

Finally, if continuous employment on multiple projects does occur with a single lawyer hired on a project basis, then hiring attorneys should examine the relationship as it evolves. When the project-based lawyer reaches a point where they may be considered associated with the firm, the firm should reassess the relationship considering the jurisdiction’s conflicts rules. Rather than being a deterrent for hiring project-based lawyers, the conflicts rules can represent a way for law firms to continuously evaluate the relationship they have with their attorneys and project-based staff to ensure clients are receiving high quality, ethically conducted, legal representation.

This post is the third in a series discussing ethics rules as they apply to lawyers in the United States who use the Lawyer Exchange website. Our next topic Competence and supervision summarizes the rules regarding supervising project-based work so that clients receive the best possible service. Lastly, a post on the unauthorized practice of law will clarify if and when this ethics rule is triggered.


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