Applying the Full Test

Applying the Full Test

Rule 1.7(b) permits a lawyer to represent a client notwithstanding a concurrent conflict if its four conditions are met, so the conditions come into play only after a conflict has been found.¹ A consentability problem therefore runs through three questions, asked in a fixed order:

1. Does a concurrent conflict exist?
2. Does the conflict fall within a limit that no client can waive?
3. If it does not, has each affected client given informed consent, confirmed in writing?

The order follows who controls each answer. Three of the conditions concern the lawyer's ability to serve each client, the force of other law, and a bar on pitting one client against another in the same proceeding, and no client can grant any of those. Only after those limits are cleared does the client's choice count, and then the consent has to be valid. The conflicts rules regulate the risk of divided loyalty, not actual harm, so a lawyer who proceeds on defective consent faces discipline even if the client suffers nothing.²

The first question turns on function rather than labels. The inquiry is whether the representation of another client, the former representation of someone else, the wish to win business from a third party, or the lawyer's own interest creates a significant risk that the lawyer will fail to carry out a duty owed to a client.³ Far-fetched possibilities of harm do not count, but a significant risk does, and if one exists, the conflict exists by definition. No showing of actual harm is required.⁴ Consider a lawyer who gives general business advice to Earl's Rooter, a company that clears tree roots out of drain pipes, and who is asked to sue Earl's Rooter for a motorist whose car collided with one of its trucks. The suit would be directly adverse to a current client, so a conflict exists even though the lawyer has never litigated for the company and the two matters are unrelated.⁵ For purposes of the “is there a conflict?” question, relatedness is immaterial, and so is the label, whether direct adversity or material limitation.⁶

A conflict that has been found moves to the second question, which asks whether any of three limits applies. The first is that the lawyer lacks a reasonable belief that competent and diligent representation can be given to each affected client. The second is that other law prohibits the representation. The third is that one client would assert a claim against another client of the same lawyer in the same litigation or other proceeding before a tribunal.⁷ A conflict that reaches any of these limits is non-consentable, which means that an exam stem describing an apparently effective waiver changes nothing, because the conflict persists after every client has signed. Some lawyers hold the mistaken impression that the client's blessing overcomes any conflict regardless of the actual effect the conflicting influence may have on the quality of the representation. That understanding is a fallacy, because a client's willingness to proceed does not cancel the effect of the conflict.⁸

Only a conflict that clears the second question reaches the third, which asks whether each affected client gives informed consent, confirmed in writing.⁹ Informed consent follows the lawyer's explanation of the material risks of the representation and the alternatives to it, and a client who has heard neither has not consented to anything.

The same conflict fails at the third question when the lawyer treats notice as consent. A lawyer who tells Alan and Bill only that a conflict may exist, and asks whether that is acceptable, has issued a warning and skipped the discussion of risks and alternatives, so no valid consent results. The conflict itself remains consentable, but proceeding without valid consent exposes the lawyer to discipline even when the representation turns out well.¹⁰ The two failures differ in what survives them. A limit under the second question forecloses the representation however thorough the paperwork. A defect under the third question can be repaired by going back, explaining the risks and alternatives, and obtaining confirmation from each affected client, and the lawyer must complete that repair before proceeding.

When the lawyers practice in a firm, the sequence stays the same and the conflict reaches more lawyers. A conflict of one lawyer is imputed to the others in the firm, and isolating the conflicted lawyer with a screen or firewall does not avoid imputation of a concurrent conflict.¹¹ The affected client may nonetheless waive an imputed conflict on the Rule 1.7(b) conditions: informed consent, confirmed in writing, plus the lawyer's reasonable belief that competent and diligent representation can be provided despite the conflict.¹² Imputation therefore widens the group of lawyers affected without changing the test for waiver.

A positional conflict passes through every step of the sequence. A lawyer who must argue opposite sides of the same legal question for two clients before the same court faces a significant risk that success for one will weaken the other, which is the kind of risk to loyalty that defines a concurrent conflict.¹³ Nothing in such a stem places the clients in the same proceeding, suggests that other law bars the work, or suggests that the lawyer cannot serve each case competently, so the answer turns on the third question.

A lawyer who handles the same two cases and mentions the overlap to neither client holds an identical conflict that is equally consentable, yet continuing is a violation, because the one condition the clients control was never met.¹⁴ A stem's report that both cases ended well does not change the result, since the rules address the risk of divided loyalty and make no allowance for a good outcome.¹⁵