1. There are numerous reported decisions of juries awarding substantial
damages against lawyers who had conflicts. See, e.g., Gunster, Yoakley
& Stewart, P.A. v. McAdam, 965 So.2d 182 (Fla. Ct. App. 2007)
(conflict resulting in $1 million judgment); Interclaim Holdings Ltd.
v. Ness, Motley, Loadholt, Richardson & Poole, 298 F. Supp. 2d 746
(N.D. Ill. 2004) (jury verdict of $8.3 million in compensatory dam-
ages and $27.7 million in punitive damages for conflict); Lawrence
Savings Bank v. Levenson, 797 N.E.2d 485 (Mass. Ct. App. 2003)
($1.5 million verdict); Schlesinger v. Herzog, 672 So. 2d 701 (La. Ct.
App. 1996) ($5.5 million verdict against lawyer who represented
both sides of business transaction); Baldasarre v. Butler, 604 A.2d
112 (N.J. Ct. App. 1992) ($1.9 million verdict against firm for
attempting to represent both sides of transaction).
2. Ethical Rules 1. 7, 1. 8, and 1. 9, Rule 42, ARIZ.R.S.CT., address
conflicts and potential conflicts with current and former clients.
3. Under ER 1.0(e), “Informed Consent” is “the agreement by a person to a proposed course of conduct after the lawyer has communicated adequate information and explanation about the material risks
of and reasonably available alternatives to the proposed course of
4. ERs 1. 7(b), 1. 8(a)( 3) (business transactions with clients), 1. 8(h)( 3)
(settling claims or allegations of unrepresented client or former client
against the lawyer), 1. 9 (representation of new client in same or
substantially related matter to one in which the lawyer represented
a former client).
5. ER 1. 8(g) (aggregate settlements).
6. Examples of conflict waivers that do not require the informed
consent to be in writing include the use of client information to
the disadvantage of the client (ER 1. 8(b)) and the acceptance of
compensation for the representation from someone other than the
client (ER 1. 8(f)).
7. ER 1. 7, comment, Informed Consent (“Informed consent requires
that each affected client be aware of the relevant circumstances and
of the material and reasonably foreseeable ways that the conflict
could have adverse effects on the interests of the client.”).
8. ER 1. 7, comment, Consent Confirmed in Writing (“Such a writing
may consist of a document executed by the client or oral consent
that the lawyer promptly records and transmits to the client.”).
9. See, e.g., Shaw Resources Ltd. v. Pruitt, Gushee & Bachtell, P.C., 142
P.3d 560 (Utah Ct. App. 2006) (affirming summary judgment in
favor of law firm on breach of fiduciary duty claim based on signed
waiver of conflict letter).
10. See, e.g., ER 1. 8(a) (business transactions between lawyer and client);
ER 1. 8(h)( 3) (settlement of claims against the lawyer by an unrepresented client or former client).
11. See Paradigm Ins. Co. v. Langerman Law Offices, P.A., 24 P.3d 593
(Ariz. 2001) (rejecting that attorney–client relationship must be
premised on express agreement: “a purported client’s belief that
[the lawyer] was their attorney is crucial to the existence of an attorney–client relationship, so long as that belief is objectively reasonable.”); In re Pappas, 768 P.2d 1161, 1167-68 (Ariz. 1988) (“
existence of an attorney–client relationship depends largely on the
client’s belief that it exists.”); In re Spear, 774 P.2d 1335, 1344
(Ariz. 1989) (focusing on client’s reasonable belief in assessing
whether attorney–client relationship existed).
12. See cases id.
13. Such admonition exists for the protection of the lawyer and the
potential client. Because the lawyer’s firm may already represent the
adverse party, the potential client’s provision of confidential information to the adverse party’s lawyers could be problematic for everyone
14. ER 1. 5(b). Courts have held that the failure to put in writing the
lawyer’s fee or rate can preclude the lawyer from recovering those
fees from the client. See Alpert, Goldberg, Butler, Norton & Weiss,
P.C. v. Quinn, 983 A.2d 604 (N.J. Ct. App. 2009) (holding law
firm’s undisclosed fee agreement addendum for collection costs and
interest was not enforceable against client); Simburg, Ketter, Sheppard
& Purdy, LLP, 33 P.3d 742 (Wash Ct. App. 2000) (finding a question of fact as to whether lawyer “sufficiently communicated the basis
or rate of its fees” as required by ER 1. 5(b)).
15. ER 1. 2(c) (“A lawyer may limit the scope of the representation if the
limitation is reasonable under the circumstances and the client gives
16. ER 1. 2(a).
17. Indeed, the Ethical Rules make clear that the lawyer “shall explain
a matter to the extent reasonably necessary to permit the client to
make informed decisions regarding the representation.” ER 1. 4(b).
18. The lawyer should also consider putting in writing communications
with the client in the following situations: ( 1) if the lawyer cannot or
will not follow the client’s instructions or expectations with respect
to a task or in the means of securing a client’s objective, such as
when the client expects that the lawyer will assist the client by the
use of means prohibited by the Ethical Rules. (See ER 1. 4(a)( 5),
lawyer must “consult with the client about any relevant limitation on
the lawyer’s conduct when the lawyer knows that the client expects
assistance not permitted by the Rules of Professional Conduct or
other law.”); ( 2) if there are non-client limitations that may impact
the lawyer’s ability to represent the client; and ( 3) if the client is not
responsive to the communications from, and attempts to contact by,
46 ARIZONA ATTORNEY MARCH 2014 www.azbar.org/AZAttorney
end of representation in
writing ensures that the
client is aware that the mat-
ter is concluded and that the lawyer will no
longer be performing services for the
client. It also formally documents the end
of the lawyer’s duty of care to the client
with respect to that matter.
The letter should state that the
lawyer’s engagement for the matter has
ended and confirm that the lawyer no
longer represents the client. It should
address the disposition of any client prop-
erty, documents or information in the
lawyer’s possession as well as the disposi-
tion of the client’s file for the engage-
ment. The letter should address how any
advance fee deposit has been handled,
and, if possible, the final billing should
accompany it. In the event that the matter
for which the lawyer represented the
client is not complete, the letter should
also identify all outstanding issues and
deadlines for the matter.
Thorough and accurate documentation of
the attorney–client relationship will help
the lawyer to comply with his or her ethi-
cal obligations, benefit the client by pro-
viding clear communications of all rele-
vant matters, and protect the lawyer in the
event of future disputes with the client
arising out of the representation.
It is more than good practice; it is
—continued from p. 45