Conflict Checks: When, Who and What

By David L. Brandon

David L. Brandon is past chair of LACBA's Professional Responsibility and Ethics Committee, a member of Clark Hill LLP, and an adjunct professor of law at Loyola Law School. He may be reached at dbrandon@clarkhill.com. The opinions expressed are his own.

We all know that we need to run conflict checks before accepting an engagement. But is that the only time we need to run a check? Who should be run through the check? What constitutes a sufficient conflict check? It is worth reviewing these rules from time to time.

When to run a conflict check

In all but the most extraordinary of circumstances, we need to run conflict checks before we accept an engagement,[1] because we are prohibited from accepting a client engagement that creates a conflict of interest without first providing written disclosure or obtaining informed written consent.[2] But there are also times when a conflict check must be run after we accept an engagement. Recognition of these situations is crucial to avoiding conflicts of interest that might result in disqualification or other adverse consequences.

A common situation is where new parties are added to a matter. For example, an attorney may represent a party in litigation in one of various capacities such as a plaintiff, defendant, or cross-party. When the attorney is first engaged, the attorney knows to run a conflict check on all known parties. However, parties may be added later: cross-complaints may be filed, pleadings may be amended by motion, fictitious parties may be identified by amendment, and intervenors may enter the litigation. Under those circumstances, these new parties must be run through a conflict check, because not only are attorneys prohibited from accepting engagements where conflicts exist, they are also prohibited from continuing engagements in certain conflict situations.[3]

The need to "refresh" an initial conflict check is not limited to litigation matters. Transactional attorneys who are advised of new parties to be included in contractual matters and estate attorneys who are advised of new beneficiaries are just two of the many examples where refreshed conflict checks should be performed. The basic rule to follow should be: new names, new check required.

In addition, it is often necessary to run conflict checks on people or entities who are not parties to the litigation or who are not involved in the particular transaction. For example, litigation attorneys often identify third parties from whom discovery must be taken, either by deposition testimony, the subpoenaing of documents, the inspection of property, or expert disclosure. This may seem like a benign event, especially when the client from whom discovery is being sought is not a party in the litigation. But it nevertheless creates a conflict, because "propounding discovery on an existing client may affect the quality of an attorney's services to the client seeking the discovery, resulting in a diminution in the vigor of the attorney's discovery demands or enforcement effort. In addition, it is possible the documents sought could expose the client from whom discovery is being sought to claims from the client serving the discovery."[4]  For this reason, conflict checks should be run on the potential targets of the discovery before commencing those efforts and, if an attorney can identify potential discovery targets prior to accepting the engagement, a conflict check on those targets should be performed before agreeing to the representation.[5]

The discovery conflict situation may not be avoided even if no discovery is being taken against the third party. If that third party ends up testifying at a contested proceeding, the attorney may be placed in a situation where the witness must be cross-examined and the testimony discredited. That alone creates a conflict of interest, because "[t]he spectacle of an attorney skewering her own client on the witness stand in the interest of defending another client demeans the integrity of the legal profession and undermines confidence in the attorney-client relationship."[6]

Another event that can require a conflict check is when attorneys or law firms consider merging or consider lateral hires from other firms with years of experience and/or a book of business. Merger discussions can occupy a spectrum of seriousness from casual discussions to more serious discussions including exchanging of financial information. As discussions progress, the attorneys or firms should set a timetable for when conflict checks must be run for the clients in the respective practices. "[I]t may be prudent to obtain written consent from all affected clients as soon as the parties begin serious negotiations toward a merger. That way, if insurmountable conflicts exist, the parties can make a sound decision about whether to proceed with the merger."[7]

Attorneys should resist any thought that a conflict check need not be performed because it is "just one more party" or "I know that we do not represent this new party." The consequences of failing to perform an adequate conflict check can be severe. The violation of the conflict of interest rules can result in the initiation of disciplinary proceedings.[8] Unresolved conflicts can also result in disqualification and court-imposed monetary sanctions.[9] It may also prevent an attorney from collecting fees earned,[10] or result in disgorgement of fees already received.[11]

Representation of clients in unresolved conflict situations can also adversely affect the client. For example, a judgment obtained for a client might be overturned if the conflict precluded one of the parties from receiving a fair trial.[12] In such a situation, the result may be a malpractice claim by the affected client.[13]

The need to avoid conflicts is a continuing one and does not end upon acceptance of an engagement. Attorneys should be alert for events that can trigger the need for a refreshed conflict check and act accordingly.


[1] COPRAC Formal Op. 2011-182. The COPRAC opinion recognized that "[i]f exigent circumstances prevent performing a conflict check, the attorney should accept representation contingent upon a subsequent conflict check revealing no conflicts, run a conflict check as soon as it is possible to do so and inform the attorney's new client that if such a conflict arises, the attorney may be required to withdraw unless appropriate informed written consent is obtained." This article does not address such exigent circumstances; rather, it addresses some common scenarios where attorneys may not recognize a conflict check is required.

[2] Cal. R. of Prof'l Conduct 3-310.

[3] COPRAC Formal Op. 2011-182; Cal. R. of Prof'l Conduct 3-310(C)(3).

[4] COPRAC Formal Op. 2011-182.

[5] Id.

[6] Hernandez v. Paicius, 109 Cal.App.4th 452, 467 (2003), disapproved on other grounds in People v. Freeman, 47 Cal.4th 993 (2010), (retrial ordered after trial court permitted defense attorney to cross-examine an opposing expert who was being represent by the defense attorney in other matters); Los Angeles County Bar Ass'n., Prof'l Responsibility & Ethics Comm., Formal Op. No. 513 (effect of designation of former client as opposing expert).

[7] Stanley v. Richmond, 35 Cal.App.4th 1070, 1089 (1995).

[8] Matter of Kroff, 3 Cal. State Bar Ct.Rptr. 838 (Rev.Dept. 1998); In re Guzman, 5 Cal. State Bar Ct.Rptr. 308 (Rev.Dept. 2014).

[9] See, e.g., Kirk v. First American Title Ins. Co., 183 Cal.App.4th 776 (2010); Terrebonne, Ltd. of Calif. v. Murray, 1 F.Supp.2d 1050 (E.D. CA 1998).

[10] Goldstein v. Lees, 46 Cal.App.3d 614 (1975).

[11] In re Fountain, 74 Cal.App.3d 715, 719 (1977); In re Occidental Financial Group, Inc. 40 F.3d 1059 (9th Cir. 1994).

[12] Hammett v. McIntyre,114 Cal.App.2d 148 (1952); Hernandez v. Paicius, 109 Cal.App.4th 452 (2003).

[13] See, e.g., Klemm v. Superior Court, 75 Cal.App.3d 893 (1977); Ishmael v. Millington, 241 Cal.App.2d 520 1966.