Conflicts and Waivers

Updated January 2005

Provided by the Association of Corporate Counsel
1025 Connecticut Avenue, Suite 200
Washington, D.C. 20036
Tel 202.293.4103
Fax 202.293.4107
www.acca.com

The purpose of this paper is to assist corporate counsel in understanding and making decisions about conflicts and waivers. Included is an overview of the rules relating to the three principal kinds of conflict of interest that result in conflicts waiver requests, as well as a discussion of the issues corporate counsel should consider when reviewing a request for a conflicts waiver. It should not be construed as legal advice or legal opinion on specific facts, or representative of the views of ACC or any of its lawyers, unless so stated. This is not intended as a definitive statement on the subject but a tool, providing practical information for the reader. Please help us improve this InfoPAK by contributing any materials you feel are relevant concerning the role of the general counsel. We hope that you find this material useful.

Thank you for contacting the Association of Corporate Counsel.

This information has been produced by Peter R. Jarvis and Mark J. Fucile at the direction of the Association of Corporate Counsel

Table Of Contents

1. Introduction


2. The Basic Conflict Rules
   1. Attorneys as Fiduciaries
   2. Current Client conflicts
      1. Simultaneous Adverse Relationships are Generally Prohibited
      2. The Prohibition Generally Applies to Entire Firms
      3. The "Hot-Potato" Rule
      4. Some Current-Client Conflicts Cannot Be Waived
      5. Intermediation Is Not a Free Pass
      6. Corporate Families
      7. Conclusion: Current Clients Generally Have Veto Power
   3. The Former-Client Conflicts Rules
      1. Former Clients Have More Limited Powers
      2. Matter-Specific Conflicts
      3. Information-Specific Conflicts
      4. The Firm Unit Rule Applies to Former-Client Conflicts
      5. Conclusion: Former Clients Are Not Without Potential Recourse
   4. Personal or Business Conflicts
      1. Stock or Warrants for Fees; Doing Business with Clients
      2. Lawyers on Client Boards
      3. Other Personal Conflicts
   5. A Conflicts Rules Postscript
      1. Fiduciary Duties May Go Beyond Ethical Obligations
      2. Be Careful About Disciplinary Threats
      3. There Are Other Types of Conflicts
         1. Joint-Defense Conflicts
         2. Issue Conflicts
         3. Attorney-Witness Conflicts
      4. Circumstances Change


3. Ethical Screens and Walls


4. What Outside Counsel Think About Waivers


5. Conflicts Waiver Consideration
   1. Is The Waiver Likely to be Enforceable
   2. What Kinds of Work is to be Done
      1. Business Matters
      2. Litigation
      3. What is Being Waived
   3. Who will Do the work
   4. Is Confidential Information at Risk
   5. How related or unrelated is the work
   6. How Broad is the Consent
   7. How Good is the Outside CounselŐs Disclosure


6. Conclusion


7. Appendix


8. Additional Resources


9. Sample Forms

Materials may not be reproduced without the express consent of ACC. Copyright © 2004 by the Association of Corporate Counsel