What are the areas of ethics that are often misunderstood by practicing lawyers? According to our long-standing ethics experts, one of them involves the lawyer’s duty of loyalty to the client, or conflicts of interest. Chuck Kidd and Kevin McGoff, ICLEF ethics faculty, bring essential reminders to practitioners of the most common ways in which lawyers get themselves sanctioned. “Conflicts of Interest” is on the list of top ten grievance complaints they often discuss. Here’s their advice on the subject:
Conflicts of Interest
This is one of the areas of ethics that concerns practicing lawyers the most, but appears to be one of the least well understood by the bar. In essence, the conflict of interest rules govern different aspects of the lawyer’s duty of loyalty to the client. Some rules act to protect the client from conflicts with other clients, other rules act to protect the client from their own lawyer and still others act to protect former clients from some of the dangers of conflicting interests after the representation is over.
Cases are legion which explore all the contours of this area of ethics. Certainly any written work exploring this subject would be a respectable tome. In the final analysis, these cases revolve around the question: “to whom does the lawyer’s loyalty run?” If the answer isn’t unequivocally, “the client,” then a conflict of interest almost undoubtedly exists. One case illustrates the extent to which conflict questions can be simultaneously complex and very apparent.
In Matter of Watson, 733 N.E.2d 934 (Ind. 2000), Respondent wrote a will for an 85-year-old man who was the largest single shareholder in an Indiana telephone company. The Respondent’s mother was the second largest shareholder in the company. Subsequently, Respondent prepared for the testator a codicil which granted an option to the company, upon the testator’s death, to purchase these shares at a price reflecting the stated book value. After the testator died, the board of directors elected to exercise the option to purchase the estate’s shares at the listed book value. About two years later, Respondent, his mother, and the company’s remaining shareholders sold all of the company’s stock, realizing an amount per share in excess of two times that paid to the testator’s estate for the shares.
The Supreme Court found that the Respondent knew or should have known that the option for the company to buy the shares at book value was setting a price which could be substantially less than fair market value. Respondent was found to have violated Prof. Cond. R. 1.8(c) because he drafted the codicils when it was reasonably foreseeable that the instruments had the potential for providing a substantial gift to him and his mother. As a result, Respondent was suspended from the practice of law for sixty days.
Following are additional cases Mr. Kidd and Mr. McGoff offer as examples of conflict of interest issues:
- Matter of Godshalk, 987 N.E.2d 1095 (Ind. 2013)
- Matter of Ross, 982 N.E.2d 295 (Ind. 2012)
- Matter of McKinney, 948 N.E.2d 1154 (Ind. 2011)
- Matter of Pugleise, 941 N.E.2d 1044 (Ind. 2011)
Knowing that keeping abreast of ethics issues is of paramount importance to all Indiana lawyers, we are grateful to Chuck Kidd and Kevin McGoff for their contributions. Their enjoyable mode of presentation adds that special element that isn’t included in all ethics programs. You have opportunities to experience their most current ethics updates as Kidd and McGoff appear again as the kickoff presentation for the 36th Annual Judge Robert H. Staton Indiana Law UpdateTM at the Indiana Convention Center in Indianapolis, September 23-24. Also, the popular Vignettes of Legal EthicsTM program is scheduled live in two locations around Indiana in October and November.
About our Law Tips faculty participants:
Charles M. Kidd, Staff Attorney, Indiana Supreme Court Disciplinary Commission, is a former Indiana Deputy Attorney General (1988-1991). He is author of numerous continuing legal education works including the Survey of Recent Developments in Professional Responsibility in volumes 26 through 28 and 30 through 36 of the Indiana Law Review.
Kevin McGoff, Bingham Greenebaum Doll LLP, Indianapolis, is an experienced professional liability and litigation attorney. He represents attorneys and judges in professional licensure matters, assists lawyers and law firms on issues pertaining to firm management, law firm dissolution and organization, malpractice, legal ethics and related litigation. Kevin has more than 32 years of experience defending lawyers and other professionals in state and federal court at trials and on appeal.
About our Law Tips blogger:
Nancy Hurley has long-standing connections with Indiana lawyers. She was formerly a member of the ISBA and IBF staffs for over 30 years. Nancy’s latest lifestyle venture is with ICLEF. We are utilizing her exceptional writing and interviewing skills while exploring how her Indiana-lawyer background fits with ICLEF’s needs. When she isn’t ferreting out new topics for Law Tips, her work can be found in our Speaker Spotlight blogs, postings on the ICLEF Facebook and Twitter pages, and other places her legal experience lends itself.
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