Lawyers find themselves in various forms of conflicts of interest arising from their personal interests. For example, lawyers have their own financial interests (e.g., separate businesses) and legal obligations (e.g., those arising from the lawyer’s service on a board of directors).[1] When those interests or obligations conflict with a current representation, disqualification battles are waged,[2] albeit seemingly infrequently.[3] The outcome often hinges on the degree of the perceived conflict between the personal and professional interests and (for imputation purposes) on the ability of another lawyer in the firm to take up the representation adverse to the lawyer’s interests.[4]

[1]     See, e.g., Restatement (Third) of Law Governing Lawyers § 125 (2000) (“Unless the affected client consents to the representation . . . , a lawyer may not represent a client if there is a substantial risk that the lawyer’s representation of the client would be materially and adversely affected by the lawyer’s financial or other personal interests.”); Restatement (Third) of Law Governing Lawyers § 135 (2000) (“Unless the affected client consents to the representation . . . , a lawyer may not represent a client in any matter with respect to which the lawyer has a fiduciary or other legal obligation to another if there is a substantial risk that the lawyer’s representation of the client would be materially and adversely affected by the lawyer’s obligation.”).

[2]     Aleynu, Inc., v. Universal Prop. Dev. & Acquisition Corp., 564 F. Supp. 2d 751, 754, 759 (E.D. Mich. 2008) (granting disqualification because the court concluded that the plaintiff’s attorney, “apparently [choosing] not to sue himself and his wife or the companies he controls, [was] attempting to collect on his client’s behalf the [$330,000 loan] he himself failed to repay”); In re Mortg. & Realty Trust, 195 B.R. 740, 745 (Bankr. C.D. Cal. 1996) (disqualifying both the lawyer and the lawyer’s firm because the lawyer was a former member of the debtor’s board of trustees and finding “that the fiduciary duty of loyalty of the trustee continues after his resignation from the board (which happened on the effective date of the [debtor’s] reorganization plan), with respect to matters considered by the board of trustees while he was a member, and that these duties conflict with those owing by the trustee’s law firm as counsel for the defendant”); Schmidt v. Magnetic Head Corp., 101 A.D.2d 268, 276, 476 N.Y.S.2d 151, 156 (N.Y. App. Div. 1984) (affirming disqualification of plaintiff’s attorney and his firm because he attempted to become a director for the defendant corporation and thereby acquire a personal and proprietary interest in the subject of the derivative litigation). But see People v. Perez, 238 P.3d 665, 667 (Colo. 2010) (“[A] district attorney’s or her office’s financial interest is a statutorily authorized basis for disqualification only if the financial interest would render it unlikely that the defendant would receive a fair trial. For a financial interest to implicate the fairness of a trial, it must be outcome dependent or have a substantial impact on the district attorney’s discretionary functions, such that the district attorney’s conduct interferes with, is contrary to, or is inconsistent with her duty of seeking justice.”). For several examples of personal interest conflicts in criminal cases, see Mickens v. Taylor, 535 U.S. 162, 174 (2002), noting that the circuit courts have found conflicts when:

representation of the defendant somehow implicates counsel’s personal or financial interests, including a book deal, United States v. Hearst, 638 F.2d 1190, 1193 (C.A.9 1980), a job with the prosecutor’s office, Garcia v. Bunnell, 33 F.3d 1193, 1194–1195, 1198, n.4 (C.A.9 1994), the teaching of classes to Internal Revenue Service agents, United States v. Michaud, 925 F.2d 37, 40–42 (C.A.1 1991), a romantic “entanglement” with the prosecutor, Summerlin v. Stewart, 267 F.3d 926, 935–941 (C.A.9 2001), or fear of antagonizing the trial judge, United States v. Sayan, 968 F.2d 55, 64–65 (C.A.D.C. 1992).

Mickens, 535 U.S. at 174.

[3]     [P]ersonal interest conflicts do not comprise a large number of reported federal disqualification cases. This is facially odd because personal interest conflicts are well-represented as bases for disciplinary action. As Professor Green noted years ago, perhaps the aggrieved clients (and their adversaries) lack the knowledge, ability, or incentives to bring disqualification motions for this misconduct. Bruce A. Green, Conflicts of Interest in Litigation: The Judicial Role, 65 Fordham L. Rev. 71, 81 (1996) (“Other categories of conflict of interest may well be more prevalent in litigation, yet evade judicial review. One example is the conflict between the lawyer’s own business interests and the interests of the lawyer’s client. The client is less likely to be aware of the facts underlying this type of conflict. If the client knows of the conflict and is troubled by it, the client will have no incentive to bring the conflict to the court’s attention rather than simply discharge the lawyer. At least in the civil context, no other party is likely to have the requisite knowledge and incentive either.”).

[4]     See, e.g., Model Rules R. 1.10(a) (“While lawyers are associated in a firm, none of them shall knowingly represent a client when any one of them practicing alone would be prohibited from doing so by Rules 1.7 or 1.9, unless . . . the prohibition is based on a personal interest of the disqualified lawyer and does not present a significant risk of materially limiting the representation of the client by the remaining lawyers in the firm.”).

[Source: Keith Swisher, The Practice and Theory of Lawyer Disqualification, 27 Geo. J. Legal Ethics 71 (2014)]