The quarterly publication of the International Legal Technology Association
Issue link: https://epubs.iltanet.org/i/96072
Key Components of an Effective Conflict of Interest Process • Hire, assign or develop a conflicts expert who will have ultimate decision-making authority if your firm doesn't already have a general counsel, risk partner, director of conflicts or similar role • Research conflicts of interest rules in each state where your firm has jurisdiction, and document practices for evaluating, clearing and waiving conflicts Establishing Parameters: The Formal Engagement Letter Many clients are intimately aware of how conflicts of interest impact their outside counsel. Outside counsel guidelines are often provided to law firms detailing how conflicts of interest will be addressed, among a variety of other topics. Clients may contend that a representation extend to their corporate affiliates, or condition the legal work upon the firm not representing competitors. Clients in certain industries have become notorious for denying conflicts waivers so their outside counsel cannot engage in matters adverse to the client. Strong new business intake and conflicts of interest practices can help your firm avoid disqualification due to unidentified conflicts. It is important that law firms do a good job of establishing the parameters of any representation in a formal engagement letter, as well as by notifying the client when the matter has concluded. These important client communications help the law firm in a variety of ways by: • Detailing exactly who the firm's client is in each matter • Maintain data carefully on your firm's clients, involved parties, corporate affiliates and the prior work history of lateral attorneys joining the firm (it is never too late to go back and clean up your data!) • Understand the work you are performing in each proposed matter, and make sure it is documented in the engagement letter (this affects decisions on whether the matter is substantially related to possibly conflicting representations) • Ensure you receive and evaluate any outside counsel guidelines dictating terms around conflicts of interest, representation of affiliates and competitors • Use declination letters to inform clients when a proposed engagement cannot proceed due to conflicts of interest (it is important the client or prospect understands when your firm has decided not to represent them in a matter) • Develop an administrative matter-closing process, including notification to clients (an open matter, even without recent activity, can be the difference between considering a client to be "current" or "former") • Outlining the scope of the engagement, in part to aid in assessment of whether future matters are "the same or substantially related" according to the Rules of Professional Conduct • Formalizing any waivers allowed by the firm to address conflicts of interest and screening procedures put in place to protect the client's interests • Noting when the engagement has concluded, potentially designating a client as a "former client" for conflicts of interest purposes Memorializing these communications in firm systems will aid in the analysis of future potential conflicts. Avoid Conflicts, Increase Success Conflicts of interest can be a complicated issue to address, integrating detailed analyses of ethical and business concerns. A combination of strong policies, trained personnel and powerful conflict-searching software is often necessary in order to fulfill a firm's obligation to identify conflicts of interest. Eric Mosca, CRM is the Director of Operations for InOutsource. He provides consulting and project management expertise to assist clients in every aspect of new business intake, conflicts of interest and records management. Eric is a Certified Records Manager and a member of ARMA International. He frequently lectures and contributes articles to industry publications on records and risk management topics. Eric can be contacted at emosca@inoutsource.com. 64 Peer to Peer