Managing Your Practice

Conflict Avoidance

What you need to know about conflict of interest systems

By Beverly Michaelis


A good conflicts checking system is essential to avoiding serious malpractice and ethical problems. No lawyer can remember every person connected with every case. Eventually a new client will appear with interests opposed to a present or past client. The conflict will waste much of your effort if you are ultimately forced to resign from the case, and you may face malpractice claims and disciplinary proceedings. How can you avoid this outcome? By establishing and implementing a system to detect conflicts prior to representation.

APPROACHES TO SETTING UP AN EFFECTIVE CONFLICT SYSTEM
There are different approaches to setting up a conflict system depending on the size and type of office. All effective systems have certain things in common. A good conflict system has all of these characteristics:

  • The system is integrated with other office systems;
  • It provides for easy access to conflict data for everyone in the office;
  • Searches check for varying spellings of names;
  • Conflict entries show the party's relationship with the client;
  • All parties connected with a case are entered into the system; and
  • Conflict searches are documented in the file.

Q: How do I set up a conflict system?
The traditional conflict system uses index or Rolodex cards to keep track of conflict names. Following the client interview, a card is created with the client's name at the top and a list of conflict names and their relationship to the client below. Individual cards are then created for each of the conflict names with the client's name below. The client and conflict cards are filed alphabetically in a card box that is searched as needed.

While this old-style card system continues to have some appeal because of its simplicity, it also has major drawbacks. Conflict searches are slow, completing cards for new client matters is time consuming, cards are often lost or misfiled and storage of cards as the conflict system grows can be problematic. Fortunately, a relatively inexpensive solution is available; a simple database can store the same information and allow for fast and easy updates and searches.

Q: How can I computerize my conflict system?
Fortunately there are many choices when it comes to setting up a computerized conflict system. Setting up your own database is one alternative, and usually the least expensive. If you prefer not to dive in to database design and want an off-the-shelf program, you have three options: contact management, case management, or conflict-checking software.

SETTING UP YOUR OWN DATABASE
If you have the Corel or Microsoft Office application suites or have purchased a new computer in the last few years, odds are you already own a database program that can be used to set up a conflict system. Database programs such as Access, Paradox, Microsoft Works and FileMaker Pro can all be used to create a conflict system.

When you set up a database for your practice, be sure to include the following fields in each client record: Date Opened; Matter Name; Matter Number (if applicable); Client Name; Attorney (initials of the responsible attorney, if applicable); Description of Matter (a description of the matter detailed enough to allow the user to determine if a conflict exists without having to pull the file); Conflict Names (names of all related and adverse parties and their relationships to the client); Date Closed; Closed File Number; and Date Destroyed.

Other fields that could be added to a conflict database include the client's federal taxpayer identification or Social Security number and the name of opposing counsel. At a minimum, always include each party's role in the case or relationship with the client. This makes it much easier to quickly assess the seriousness of a potential conflict.

If you would like to use existing software to set up a conflict checking system and need help, the practice management advisers of the Professional Liability Fund can assist you. To take advantage of our free and confidential service, call (503) 639-6911 or (800) 452-1639.

CONTACT MANAGEMENT SOFTWARE
Contact management programs are used to manage prospect and client information and usually consist of a calendar, a task list and contact or 'Rolodex' cards. The contact or 'Rolodex' portion of the program contains the client information. Each client has his or her own card which contains separate fields for the client's mailing address, telephone number, e-mail address, etc. Each card also has a 'Notes' area into which the law firm can enter conflict information. These cards can then be searched for potential conflict names. Examples of contact management programs include Sidekick 99 (visit www.starfish.com); GoldMine (available through www.egghead.com and other sources); Act!2000 (visit www.officedepot.com and similar sources); and AnyTime (www.individualsoftware.com). These and similar products are readily available for under $200, sometimes much less, but are not legal-specific and may be limited in space as to the number of client cards or records which the program will store.

CASE MANAGEMENT SOFTWARE
If you are looking for a solution that integrates various office systems (conflicts, client database, matter database, calendar, tickler, etc.), case management software may be the right choice for you. Case management software is specifically written for the legal profession and has unlimited storage capacity plus many other features as detailed above. Examples include Time Matters (www.timematters.com), Amicus (www.amicus.ca), Abacus (www.abacuslaw.com/law) and Trial De Novo (www.denovosys.com). For a review and discussion of case management software, see the article entitled What? Me Worry? Finding the Right Case Management Software by Dee Crocker which appeared in the May 2001 issue of the Oregon State Bar Bulletin.

CONFLICT CHECKING SOFTWARE
If you are satisfied with the software your office presently uses and you are not interested in a case management program, then conflict checking software may be the right choice for you. These programs are designed solely to manage conflicts and do so very effectively. Your options at this level include Conflict Checker by Billing Software for Attorneys (www.seabill.com) and ConflictSearch by Tremco (www.tremco.com). Softlaw Corporation of Salem offers a conflict module which can be used on its own or in conjunction with their calendaring, accounting and time and billing software. Contact Softlaw at (800) SOFT-LAW for more information.

Q: What names should I be entering in my conflict system?
Whether you track conflicts manually or choose to computerize, your conflict system must capture more than just the names of the client and the adverse party. Everyone connected to the case, including lay witnesses, expert witnesses and so forth should be added to the system. See the sidebar, Names to Track In Your Conflict System, accompanying this article.

Lawyers in your own firm, staff members and close relativesof lawyers and staff should be listed in the conflict system as well. This ensures that cases will not be taken against people connected with the firm.

In addition to all clients1, enter all prospective clients and declined clients into the conflict system. Failure to enter prospective or declined clients in the conflict system can be embarrassing, costly and may result in ethical or malpractice claims against you. For example, assume a husband comes in for a consultation because he is contemplating a divorce. During the consultation, the husband discloses confidential information. The husband then decides not to proceed with the dissolution or you decline to represent the husband. Two years later the wife comes in to your office seeking a divorce. If you accept the wife as a client, you will have a conflict of interest. This could happen easily if you forgot about the consultation with the husband and did not maintain a record of consultations in the conflict system. A similar situation can occur when two lawyers in the same firm interview prospective clients who have adverse interests.

Q: When should I run a conflicts check?
A good conflict system includes a procedure for checking conflicts three times. A preliminary check should be done when the prospective client first contacts the office. This will allow you to decline further discussion, preventing a crucial divulgence of confidences. A second, more thorough check, should be conducted immediately following the client interview when you have the names of the other parties connected to the case. A third check must be done whenever a new party enters the case.

Q: What should I do when a name comes up during a conflicts check?
If a name is found in the conflict system, the responsible lawyer should be notified immediately. The faster the lawyer is aware of the new client's relationship to a current or past case, the better position the lawyer is in to make a decision to decline representation or make proper disclosure. The fact that a name does come up during a conflict check does not necessarily mean there is a conflict. The lawyer, not staff, must make the final decision. However, if there is no way to check for conflicts, or if a check was not done, the lawyer will not know until it is too late.

Q: How should our firm screen for conflicts when a new lawyer or staff person is hired?
Conflicts can arise when a new lawyer or staff member comes to the firm. The new lawyer or staff member may have worked on cases that present a conflict with the new firm's clients. Every lawyer and staff member should maintain a personal list of past clients. The new person should review a list of the firm's clients and compare it with his or her personal list.

Q: How can we document conflict checks?
A client intake sheet or specific conflict check request forms are possible methods for keeping track of conflict checks. Always show the names that were checked and who did the check. When a new file is opened, make sure that the conflict check was actually done.

Sample client intake and conflict check request forms are available from the Professional Liability Fund. Call (503) 639-6911 or (800) 452-1639, or visit the PLF website at www.osbplf.org.

Q: How can we screen for potential conflict names that may not be in our conflict system?
Regularly circulate a list of new clients and cases to all lawyers and staff in the office. Ask that everyone review the list for potential conflicts. This way, a new lawyer or staff member should not have potential conflicts that the firm's conflict system could not detect. Circulating a list also serves as a back-up to the conflict checking routine. Someone in the office may recognize a conflict from the list that would not be detected otherwise.

QUESTIONS ABOUT SETTING UP CONFLICT SYSTEMS
If you have questions about setting up a conflict system or would like help reviewing your conflict procedures, contact the practice management advisors of the Professional Liability Fund at (503) 639-6911 or (800) 452-1639. Our services are free and confidential.

For ethics assistance on potential conflicts of interest, call Sylvia Stevens (ext. 359) or George Riemer (ext. 405) at (503) 620-0222 or (800) 452 8260. +

ENDNOTE
1. All clients should be included in your conflict system, including private pro bono clients, legal advice given through volunteer work at pro bono agencies, such as Legal Aid Services of Oregon and agencies or individuals for whom you provide investigation work, such as the Oregon State Bar Professional Responsibility Board.

NAMES TO TRACK IN YOUR CONFLICT SYSTEM

When listing an individual, be sure to include all known names (i.e., former or maiden names). When listing lawyers and employees of the firm, consider including contract attorneys, temporary workers and freelancers. Key vendors or service providers of the firm may also be included in the conflict system.

Some examples:

Litigation: Insured; lay witness(es), plaintiff(s); defendant(s), insurer; guardian ad litem; spouse; expert witness(es).

Corporate/Business/Real Estate: Owner/spouse; buyer(s); seller(s); partner(s); officer(s); shareholder(s); director(s); subsidiaries/affiliates; key employees; property address; any opposing party in a transaction.

Probate: Deceased; personal representative; spouse/children/heirs/devisees; trustee/guardian/conservator.

Estate Planning: Testator; personal representative; spouse/children/heirs/devisees; trustee/guardian.

Dissolution: Client; spouse; children; grandparents.

Criminal: Client; co-defendant(s); witness(es); victim(s).

Workers' Compensation: Injured worker; insurer; employer.

Bankruptcy: Client; spouse; creditors.

Your firm: All lawyers; spouses/parents/siblings/in-laws; employees.

Other: Declined clients and adverse parties, if known; prospective clients; agencies or individuals for whom you provide investigation work, such as Oregon State Bar Professional Responsibility Board. +


ABOUT THE AUTHOR

The author is a lawyer and practice management adviser with the Professional Liability Fund. For free office system consultations and assistance, contact Bev Michaelis, Carol Wilson or Dee Crocker at the numbers above.


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