Effective July 1, 2015, the Supreme Judicial Court adopted
comprehensive amendments to the Massachusetts Rules of Professional
Conduct (MRPC). Among the most significant changes is the new
definition of "informed consent" and the requirement that a
client's informed consent to conflicts and potential conflicts be
confirmed with a writing. This new requirement of a writing applies
whenever an attorney represents two or more clients, commonly
referred to as multiple party or common representation. Examples of
common representation include preparing an estate plan for a
husband and a wife, representing co-defendants in civil litigation,
and representing both a buyer and a lender in a real estate closing
transaction. In all of these situations, Rule 1.7 of the MRPC now
requires that each client's informed consent to the
potential conflicts inherent in the common representation be
confirmed in writing. The ethics rules continue to discourage
common representation in a criminal context given the high
likelihood that an actual conflict will materialize.
Obtaining a client's informed consent under the definition that
became effective July 1, 2015, requires the attorney to engage in a
detailed discussion with each client to explain the material risks
inherent in the common representation and the reasonable
alternatives. A writing that confirms a general waiver will not
suffice under this new standard. If the consent given is either
general or open-ended, it is unlikely that the client understood
the material risks. Likewise, a writing that does not confirm a
detailed conversation with each client may be ineffective even if
that writing is signed by the client. The writing is not a
substitute for discussing with the client the circumstances
particular to that case and the potential conflicts to which the
client is consenting in that situation. The purpose of the writing
is to impress upon the client the importance of the consent that
was discussed and to avoid later disputes or ambiguities. Although
technical compliance with this provision of Rule 1.7 can be
achieved with a writing that the lawyer transmits promptly
following a conversation with the client, the best practice is to
have the client execute the writing after the client has had a
reasonable opportunity to consider the risks and alternatives that
were discussed. Having the client execute a writing which confirms
a conference with the attorney, will minimize the likelihood of
credible confusion at a later date.
The effectiveness of a potential conflict waiver will be judged
by whether, and to what extent, the client reasonably understood
the material risks that the waiver entailed. The comments to rule
1.7 point out that "[t]he more comprehensive the explanation of the
types of future representations that might arise and the actual and
reasonably foreseeable adverse consequences of those
representations, the greater the likelihood that the client will
have the requisite understanding." Where a client is a
sophisticated consumer of legal services and is reasonably informed
regarding the risks, a waiver is more likely to be enforceable.
Similarly, clients who are represented by independent counsel when
weighing the considerations involved will possess a more
comprehensive understanding of the risks and benefits particular to
the common representation being proposed.
Although waivers will necessarily need to be tailored to the
subject matter and circumstances of the particular representation,
there are certain reasonably foreseeable consequences inherent in
all common representation that must be discussed and confirmed in
every written waiver. For example, the possibility that an actual
conflict will arise in the future that requires the attorney to
withdraw from representing one or more clients, must be disclosed
and discussed. Such an event would require each client to incur the
additional expense of hiring separate counsel, and may also result
in delays that could carry financial or other consequences.
Benefits inherent in all common representation will invariably
include eliminating duplication of effort and expense. In addition,
there are situations where a united effort is far stronger and more
likely to be effective than individual efforts.
There are also responsibilities inherent to all common
representation that must be disclosed and discussed. The client
bears a greater burden for decision-making in a common
representation situation. If a disagreement arises among the
clients concerning the strategy to be implemented or whether they
should accept a settlement, the attorney cannot advocate for one
client to the exclusion of the position taken by the other client.
Such disagreements would need to be resolved by the clients without
the attorney's assistance or with the assistance of independent
counsel hired at each client's own expense. In certain situations,
the risk of adversity is so great that common representation should
not be undertaken. If contentious litigation or negotiations are
likely, the clients should be encouraged to hire separate counsel
rather than consent to common representation. Among the relevant
factors for consideration are whether the representation involves
creating or terminating a business or commercial relationship, and
the existence of any current or prior discord between the clients.
Other relevant factors include whether it is likely that there will
be a discrepancy in the clients' testimony, an incompatibility in
their positions or a possibility of different settlements being
offered to each client. The attorney should also examine his or her
relationship to the clients. If the attorney has a pre-existing
relationship with any of the clients or the attorney will represent
one or more of the clients on a continuing basis in the future,
those circumstances may make it difficult for the attorney to
maintain impartiality and common representation may not be
advisable.
Paramount to any discussion regarding informed consent to common
representation is the impact that common representation will have
on confidential and privileged information. Clients must understand
that although all information discussed with the attorney will
remain privileged and confidential as to third parties, there is no
confidential or privileged information between the clients being
commonly represented. If one of the clients shares information that
is material to the representation and asks the attorney to keep it
secret from the other clients, the attorney cannot comply with that
request. The information will necessarily be disclosed to the other
clients. Further, the request by one client that material
information not be shared with the other clients could be an event
that requires the attorney to withdraw from representing all
clients. Clients should also understand at the outset that if they
are not aligned in the future and they litigate against each other,
none of their communications with the attorney are protected as
privileged or confidential.
Often in a common representation situation the responsibility
for payment of the fees and expenses will be borne
disproportionately by the clients. Assuming the arrangement will
not materially limit the attorney's representation of all clients,
each client can give informed consent to such an arrangement.
Irrespective of how the obligations to pay the attorney's fee are
apportioned among them, a delinquency has the potential to create
adversity that may impact the attorney's ability to provide
continuing representation. For example, where a bill becomes
delinquent it may give rise to the attorney's motion to withdraw on
behalf of all clients even though the delinquency may have been
created by only one of the clients failing to pay his or her share
of the ongoing fees and expenses being incurred. This potential
conflict should be discussed with each client at the outset and
confirmed in writing.
In some common representation situations, the ethics rules may
require a further writing signed by the client after the initial
engagement. The settlement phase of a dispute or litigation is such
an example. Under the new rules, aggregate settlements for multiple
clients now require informed consent signed by the clients where
the prior rules permitted oral consent. Before a settlement offer
is made or accepted, an attorney must speak with each client to
inform each of the material terms of the settlement. Those
conversations must necessarily include an explanation concerning
what each client will pay or receive as a result of the settlement.
A subsequent writing confirming those conversations must be signed
by each client.
Both the attorney and the clients benefit from identifying
potential conflicts and engaging in a complete and candid
discussion, as well as remembering that not every potential
conflict is waivable. Multiple party representation can be very
advantageous to clients given both the economic efficiencies and
the strength in presenting a united front. However, if attorneys
fail to appreciate potential conflicts at the outset, or to
identify potential conflicts during the representation which
require the clients to consult with independent counsel, they could
fail to achieve their clients' joint objectives. By comparison,
anticipating and discussing potential conflicts can often eliminate
actual conflicts from materializing. Being forced to withdraw as
counsel for one or more of the clients during the representation is
likely to significantly increase the costs for all clients and will
inevitably leave an attorney with unhappy clients. Either of these
undesirable results can lead to bar counsel complaints, or an
attorney being in the unenviable position of defending a legal
malpractice claim. It is advisable that attorneys review their
practices and procedures and establish protocols in multiple party
representation to ensure compliance with the new ethics rules. The
mandated potential conflict waivers are fact-intensive and there is
no standard waiver that can be reliably used in all cases. However,
the author is providing sample potential conflict letters for
common representation situations on My Bar Access.