Conflicts of Interest

As reported in the publication Insurance Journal, insurers cite conflicts of interest, including perceived conflicts, as the most common alleged basis for a legal malpractice claim.  With larger firms the risk of conflicts increase when there are mergers, acquisitions and lateral hiring.  According to the article, nearly half the insurers polled cited an uptick in claims arising out of lateral hires and inadequate resolution of conflicts of interest.  For example, one insurer pointed to a lateral hire attorney not being trained or supervised properly and another to the attorney continuing to work for a client of their prior firm that was not a client of the new firm.  Like other states, the Texas Disciplinary Rules of Professional Conduct provide rules concerning conflicts of interest.  In this regard, TDRPC Rule 1.06 instructs that a “lawyer shall not represent opposing parties to the same litigation.”  As the comment to Rule 1.06 explains, “[l]oyalty is an essential element in the lawyer’s relationship to a client.” Therefore, a fundamental conflict of interest principle recognized by disciplinary rules is that a lawyer may not represent opposing parties in litigation.