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Can Playing Both Sides Put
You in the Middle?
There's an old joke about the client who hired a one-armed lawyer, because he wanted advice from a counselor who wouldn't say, "On the other hand..." The analogy comes to mind when assessing whether lawyers can effectively and ethically represent opposite types of clients - for example, insurance carriers and insurance coverage plaintiffs.
The ABA's Rule of Professional Conduct 1.7 certainly gives a "two-handed" answer. On the one hand, the Rule sensibly says that a lawyer cannot represent two parties who are directly adverse in the same matter; it also bars representation "when there is a significant risk that the representation of one or more clients will be materially limited by the lawyer's responsibilities to another client, a former client or a third person or by a personal interest of the lawyer."
Yet on the other hand the Rule says that a lawyer may represent clients whose interests are opposite if the lawyer "will be able to provide competent and diligent representation to each affected client."
Given that this stipulation opens the door to representing opposite types of clients, the consideration for the lawyer becomes a practical one. In our analogy above, would an insurance carrier get upset if they knew that their coverage defense lawyer was also representing plaintiffs in coverage matters against other carriers? If so, the plaintiff business may not be worth it.
"On the other hand," a plaintiff lawyer might well find substantial advantages in undertaking defense work. Such work would even out cash flow and keep the lawyer from being dependent on one type of client. The example of the Heller Ehrman firm, which failed several years ago, is instructive: the firm primarily handled litigation defense, and when a number of large cases suddenly settled there was no new business in the pipeline to replace it.
There is also the consideration of whether certain types of work in opposition will create financial problems for the firm. Plaintiff cases are often taken on a contingency basis, for example, while defense work is typically done at an hourly rate. Corporate defense firms that enter into contingency arrangements have found that they face increased problems from their use.
Some of these problems crop up while the contingency matter is open and there must be compensation for lawyers who bring no money into the firm and, in fact, are responsible for cash outflow in the form of their compensation and expenses advanced to sustain the lawsuit. Then, if the firm is successful and the contingency money flows in, conflicts arise over who gets what. How much should the lawyers working on the matter receive?
Isn't the matter the "property" of the firm? Didn't the firm advance the costs, not the lawyers? What is fair?
Such issues show that any decision to take on clients from opposing perspectives should be well thought out. Firms that consider all business to be good business, without regard to thinking through the consequences, might find that taking fees from too many sides puts the firm squarely in the middle.
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Following the worst economic crisis since the Great
Depression, and facing a sea change in clients' demands
and expectations, law firms must respond and adapt
quickly and effectively. Law firms must choose the kind of
law practice they will be; the marketing and business
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Success lies in identifying and capturing the right kinds of
clients, providing the services those clients need in ways
that add value, and ensuring prompt payment and the
ability to grow profits. This book, based on the
experiences of Ed and his clients over 20 years of
coaching and consulting, provides the keys to
successfully thriving in the new era.
Available for Pre-Sale
Ships in March 2010
Pre-Sale Price: $99
Regular Price: $120
Call or Order Online at:
1-800-837-5880
www.lawbiz.com
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Personal Commentary
I was reminded just the other day of a cardinal rule of professional service business:
Ask for referrals.
And, in my case, I realized I hadn't followed my own advice. Thus, if you know someone
who would benefit from coaching him/herself to a greater level of success, I would deem
it a great favor if you would do one of the following:
i) Tell him/her about me and
provide my contact information;
ii) Give me the name and contact information and I'll
personally contact the attorney; or
iii) Let's arrange a conference call among you, me
and the suggested lawyer.
Thank you for your support. I value our connection.
Best wishes,
Ed Poll
lawbiz.com
lawbizblog.com
www.LawBizForum.com
800-837-5880
Please use the URL below to link to this issue:
www.lawbiz.com/nlimages/tip-5-4-10.html
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What Readers Are Saying...
"No matter how you slice it, there is
no substitute for wisdom and
experience. Ed Poll has
demonstrated both in this eyeopening
book about the essential
elements of running a profitable law
practice. He provides practical
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adopt and incorporate best practices
for each. After explaining the pros
and cons of every decision, he makes
recommendations and provides
useful guides disguised as key
principles. Buy the book so you too
can access Ed's wisdom and
experience. It's worth much more
than the investment."
STEWART L. LEVINE. ESQ.,
FOUNDER, RESOLUTIONWORKS
AUTHOR, GETTING TO RESOLUTION;
THE BOOK OF AGREEMENT AND
COLLABORATION 2.0
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