Sample Conflict Waiver

Dual Representation of Adverse Clients by Same Law Firm

 

USE NOTE:  Dual representation should be discouraged and agreed to by the firm only as an accommodation to clients in unusual situations.  Use of this form is strictly limited to transactional matters, and is not acceptable in connection with litigated disputes.

 

[Client A]

[Client B]

 

Re:       Waiver of Conflict of Interest

 

Dear ______________ and _______________:

 

We have represented and continue to represent _______________ [Client A] with respect to ____________ [describe matters].  We also have represented and continue to represent ____________ [Client B] with respect to ______________ [describe matters].  We have been asked by both clients to simultaneously represent both clients with respect to _____________ (the “Transaction”).  The purpose of this letter is to discuss with each of you the actual and potential consequences of such simultaneous representation, and to explain the circumstances under which we would be willing to represent both parties simultaneously if, after full consideration of the consequences, both clients wish us to do so.

 

Simultaneous representation of parties with adverse interests by attorneys in the same law firm involves a number of departures from professional norms, and should not be undertaken by any such party without careful consideration.  In particular, we want you to be aware of the following. 

 

1.         Under applicable rules of professional conduct, a law firm owes each of its clients a duty of loyalty, which would normally preclude any attorney within the firm from undertaking a representation adverse to any client of the firm without the affected client’s informed consent.  Other rules generally prohibit a firm from undertaking any representation involving an actual or potential conflict of interest without the informed consent of all affected parties.  Such a situation exists whenever a firm represents two clients simultaneously in a situation in which their interests are actually or potentially adverse.

 

2.         The conflict of interest, and the need for informed consent, exist no matter how cordial the business relationship between the two parties currently is or is anticipated to be, and no matter how non-controversial the Transaction is anticipated to be.

 

3.         The conflict of interest, and the need for informed consent, exist even where different “client teams” within the firm act on behalf of each client and an “ethical screen” is erected between the client teams that prohibits the sharing of either client’s confidences with the members of the other client’s team.

 

4.         We do not recommend simultaneous representation of adverse parties, and have not recommended this simultaneous representation to you.  We have recommended, instead, that each party seek separate representation.  We also recommend that each of you seek the advice of independent counsel of your own choice regarding this written consent.  If, however, it is the wish of both clients that we undertake the simultaneous representation of both parties with respect to the Transaction, we will undertake to do so under the terms described herein. 

 

5.         It may not be possible for a single law firm to represent both parties to the Transaction in the same aggressive manner as would two separate and independent law firms.  By giving the consent requested in this letter, you are, in effect, waiving that kind of zealous representation of your individual and conflicting interests with respect to the Transaction.  It is possible that each or both of you might be advised by independent counsel to demand or offer different or more favorable terms and conditions with respect to the Transaction than we can or will demand or offer.

 

6.         Moreover, regardless of the terms upon which the matters between the two clients are concluded, the fact that one law firm has been involved in the representation of both parties may give rise to a perception on the part of shareholders, investors or other third parties that different terms might have been arrived at had each of you had separate representation by an independent law firm.

 

7.         If a dispute should arise in the future between the two of you concerning the Transaction or any other aspect of your dealings with each other, we believe we would have to withdraw, or would be disqualified, from representing either of you with regard to that dispute or any other relationship you might then have with each other.  You would then each have to retain separate counsel, resulting in additional expense and inconvenience that you might not have incurred had you been separately represented from the outset.

 

8.         In connection with the Transaction and our past and present relationships with each of you, you should also consider the following:  _______________________________.  [Describe in detail any additional relevant facts that are specific to this situation, and the actual and reasonably foreseeable adverse consequences of such facts.]

 

9.         [Optional; to be used where consent is prospective, and an ethical screen is to be established.  The use of such a screen is not strictly required but may provide additional reassurance to one or both clients.] In the event both of you wish to proceed with this simultaneous representation after having considered the foregoing, we propose to establish a “[Client A] Team” consisting of __________ [names of attorneys and paralegals] and a “[Client B] Team” consisting of ______________ [names of attorneys and paralegals].  An ethical screen will be established within the firm to prevent members of either team from having access to the other client’s files, and to prevent members of either team from discussing the confidential information of one client with members of the other client’s team unless permission has been granted by the client to do so.

 

We will be pleased to answer any questions you may have concerning this representation or this requested consent.  If you do wish to consent, please sign the enclosed extra copy of this letter and return it to us in the enclosed envelope.

 

Very truly yours,

 

 

By:_______________

 

 

ACKNOWLEDGEMENT AND CONSENT

 

Despite any potential or actual conflict of interest which may exist now or in the future, we hereby consent to the firm’s simultaneous representation of both [Client A] and [Client B] with respect to the transaction as described above.  We further agree that the firm may withdraw its representation of either client or both clients without prejudice should it determine that continued representation might violate applicable rules of professional conduct.

 

[CLIENT A]

By:      

 

[CLIENT B]

By: