Evaluate Your Firms Exposure to Legal Malpractice Claims with this Conflict of Interest Checklist

An excerpt from TLIE's Claims Prevention Tool, The Legal Malpractice Self-Audit Checklist.

This checklist is designed to let you evaluate your practice and your firm's procedures for detecting and dealing with conflicts of interest. The checklist is not comprehensive, but it can raise questions that could help you avoid problems with conflicts of interest. Preferred answers to the questions are in blue.

Failure to give the preferred answer does not necessarily mean you have a serious problem, but it does suggest you should evaluate why you do or do not do what the question suggests is the right answer.

1. Do you and your firm have a comprehensive system for discovering conflicts of interest?

Yes	No

2. Do you and your firm have procedures to prevent opening a file without obtaining basic conflict of interest information?

Yes	No

3. Do you check for any potential conflicts prior to receiving confidential information from a potential client?

Yes	No

4. Do you share information, through new matter memoranda, on the identity of new and prospective clients with attorneys and appropriate staff on at least a weekly basis?

Yes	No

5. Does your firm have a centralized index, accessible to attorneys and staff, of the following parties? (NOTE: This is an ideal index. You may be able to check for some of these conflicts through the new matter memos suggested in Question 4.)

a. attorneys and staff of the firm;

Yes	No

b. business interests of attorney or staff;

Yes	No

c. Clients;

Yes	No

d. persons declined as clients;

Yes	No

e. adverse parties;

Yes	No

f. co-plaintiffs or defendants;

Yes	No

g. known allies of clients and adverse parties;

Yes	No

h. subject matter of representation;

Yes	No

i. known relatives of anyone in the index;

Yes	No

j. corporate parents or subsidiaries of any entity in the index;

Yes	No

k. trade names of entities in the index;

Yes	No

l. directors and officers of entities in the index;

Yes	No

m. partners or known shareholders of entities in the index;

Yes	No

n. known employees of entities in the index;

Yes	No

o. attorneys for any party in the index?

Yes	No

6. If a potential conflict is detected, do you either decline to take the case or notify the client of the potential conflict in writing every time?

Yes	No

7. Does your firm have form letters for conflict disclosures that seem to occur on a regular basis?

Yes	No

8. Does your firm have a mandatory review procedure for all cases proposed to be accepted in potential conflict of interest situations?

Yes	No

9. Do you or anyone in your firm engage in any of the following practices?

Yes	No

a. act as both an attorney and an officer or director for the same corporation;

Yes	No

b. have a financial interest in a client matter;

Yes	No

c. represent adverse parties in "friendly" suits (such as a friendly divorce) or real controversies;

Yes	No

d. participate in a business transaction along with a client;

Yes	No

e. accept stock in lieu of fees?

Yes	No

10. Do you always (a) confirm who you represent in writing, and (b) inform non-clients, such as partners in partnerships that you represent or family members of clients who ask for advice, who might believe that you represent them that you do not represent them in writing?

Yes	No

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