Wisconsin Lawyer
Vol. 85, No. 9, September 2012

Question

I understand that conflicts can arise between clients, but what does it mean to have a conflict if I have a personal interest that is contrary to my client's interest?

Answer

Conflicts of interest can arise in several types of settings. We are most familiar with conflicts of interest that occur during representation of two different clients or when an attorney wants to represent one client with an interest that is contrary to the interest of a former client. Conflicts also arise when the representation of a client will be in conflict with a lawyer's personal interests. Such situations do not arise often but when they do, the lawyer must engage in a conflicts analysis to determine whether the lawyer can represent the client.

SCR 20:1.7 deals with conflicts of interest, including "personal conflicts" that might exist when an attorney is seeking to represent or currently representing a client. The relevant language of the rule is as follows:

"SCR 20:1.7 Conflicts of interest current clients.

(a) Except as provided in par. (b), a lawyer shall not represent a client if the representation involves a concurrent conflict of interest. A concurrent conflict of interest exists if:

. . .

(2) there is a significant risk that the representation of one or more clients will be materially limited by ... a personal interest of the lawyer."

The SCR 20:1.7 comment (which is not binding on lawyers) gives some guidance to lawyers when dealing with a personal conflict of interest. The comment reads as follows:

"Personal Interest Conflicts. [10] The lawyer's own interests should not be permitted to have an adverse effect on representation of a client. For example, if the probity of a lawyer's own conduct in a transaction is in serious question, it may be difficult or impossible for the lawyer to give a client detached advice. Similarly, when a lawyer has discussions concerning possible employment with an opponent of the lawyer's client, or with a law firm representing the opponent, such discussions could materially limit the lawyer's representation of the client. In addition, a lawyer may not allow related business interests to affect representation, for example, by referring clients to an enterprise in which the lawyer has an undisclosed financial interest. See Rule 1.8 for specific Rules pertaining to a number of personal interest conflicts, including business transactions with clients. See also Rule 1.10 (personal interest conflicts under Rule 1.7 ordinarily are not imputed to other lawyers in a law firm)."

A recent decision from California, although not in a disciplinary matter, shows the importance of lawyers understanding personal conflicts of interest and appropriately addressing them. In this case, the lawyer represented a client seeking permits to construct a new development to which several local residents objected. After the development permit was originally denied, new counsel pursued legal action, and the first counsel became involved with his spouse in opposing the development through local political action. The California courts found that the first lawyer breached his duty of loyalty to the client by engaging in the political activities. This is but one example of how a personal-interest conflict can arise.

A personal conflict of interest also may arise in settings in which a lawyer is asked to represent a client and the client has an adverse claim or interest against another lawyer in the same law firm. This may not be an actual conflict of interest between two clients but the potential that the lawyer will not effectively advocate for the client because such advocacy may harm another lawyer in the law firm raises the specter of a personal-interest conflict. Lawyers should also be aware of the activities of family members or close personal friends, to avoid an appearance of conflict of interest because of a personal interest or personal relationships.

Lawyers' personal interests normally do not directly affect the representation they provide to clients, other than receiving fees for services. Nevertheless, lawyers should always be sensitive to the nature and scope of the representation being provided to the client to avoid these types of personal-interest conflicts.

Wisconsin Lawyer