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LawBiz® TIPS – Week of January 29, 2013

LawBiz(r) newsletter

I watch in amazement as the story of Lance Armstrong and the sport of cycling in the 1990s continues to unfold. It's like a bad mystery novel, but it certainly has its twists and turns.

First, all the denials; then the Oprah Winfrey show. Yes, I did watch both episodes. And then last night, I watched the "other side" on 60 Minutes; the head of USADA (U.S. Anti-Doping Agency) asserts Armstrong is still lying and needs to be under oath to answer many more questions. Thus far, Armstrong has danced around the criminal fraud provisions, staying out of harm's way, though admittedly he has now opened himself up to civil fraud charges. Is Armstrong merely a jerk or an athlete who had so much for so long, irrespective of how he got there, that he still thinks he's invincible? Is he getting good advice or bad advice? I'm eager to see the next chapter. Actually, I would hope this saga would just go away.

I'll be in Tucson, AZ the week of February 4th. If you're there and want to visit, contact me.

Ed signature

Can You Have a Two-Sided Practice?

Can lawyers effectively and ethically represent opposite types of clients - for example, insurance carriers and insurance coverage plaintiffs? The ABA's Rule of Professional Conduct 1.7 provides a sensible answer. It is obvious, according to the Rule, that a lawyer cannot represent two parties who are directly adverse in the same matter, or two parties whose concerns will materially limit the lawyer's responsibilities to another client. Yet the Rule also says that a lawyer may represent clients whose interests are opposite if the lawyer "will be able to provide competent and diligent representation to each affected client."

Given that this stipulation opens the door to representing opposite types of clients, the consideration for the lawyer becomes a practical one. In our analogy above, would an insurance carrier get upset if they knew that their coverage defense lawyer was also representing plaintiffs in coverage matters against other carriers? If so, the plaintiff business may not be worth it. However, a plaintiff lawyer might well find substantial advantages in undertaking defense work. It would even out cash flow and keep the lawyer from being dependent on one type of client.

There is also the consideration of whether certain types of work in opposition will create financial problems for the firm. Plaintiff cases are often taken on a contingency basis, for example, while defense work is typically done at an hourly rate. Corporate defense lawyers who bill on contingency arrangements must receive support from their firms in terms of compensation and staff services while the contingency matter is open and expenses are incurred to sustain the lawsuit. Then, if the firm is successful and the contingency money flows in, conflicts can arise over the share received by other lawyers in the firm who incurred the support costs.

Such issues show that any decision to take on clients from opposing perspectives should be well thought out. Firms that consider all business to be good business, without regard to thinking through the consequences, might find that taking fees from opposing sides creates more problems than it's worth. A better alternative would be to diversify the firm's practice to encompass several different but still related areas of practice emphasis. A personal injury lawyer, whether serving plaintiffs or insurers, might consider diversifying into such areas as construction law or representing architects or realtors in professional services disputes. The techniques of discovery and trial advocacy would be the same, the firm's business base would be diversified, and conflicts of interest would not be a problem. The issue is not just more business - it's getting the right business as a better foundation for firm profitability.

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In this issue:

Can You Have a Two-Sided Practice?

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