Common Lawyer Conflict of Interest Examples

Legal professionals must follow strict ethical rules to avoid situations where personal interests or other client relationships compromise their ability to provide zealous representation. Conflicts can bring serious consequences, including malpractice claims and disciplinary actions that may require lawyers who sue lawyers to resolve.

Common examples of legal conflict of interest include:

• Representing both parties in a divorce or business dispute where the interests of the clients are directly adverse to each other
• Taking on a new client whose case involves suing a current or former client without proper consent and conflict waivers
• Having a personal financial interest in the outcome of a client’s case, such as owning stock in a company the client is suing
• Representing a client in a matter where the lawyer’s family member has opposing interests or stands to benefit from an adverse outcome
• Accepting representation of a client when the lawyer’s law firm previously represented the opposing party in the same or substantially related matter
• Engaging in a business transaction with a client where the lawyer gains an unfair advantage due to confidential information or the attorney-client relationship
• Representing multiple plaintiffs in a single personal injury case, and doing things to the benefit of one client and to the detriment of one or more of the other joint clients.

In other words, legal conflict of interest is doing anything during the handling of a case that benefits the attorney, to the detriment of the client.

If you believe you’ve encountered any of these lawyer conflict of interest examples or have concerns about your attorney’s representation, contact Ross Sears today at (713) 223-3333 to discuss your situation and protect your legal rights as soon as possible.

What would be considered a conflict of interest with a lawyer?

Legal conflicts of interest exist on a spectrum, ranging from obvious violations like representing opposing parties in litigation to more nuanced situations that require careful ethical analysis.

The American Bar Association’s Model Rules of Professional Conduct provide the framework for identifying these conflicts, but real-world applications often involve complex factual scenarios where multiple ethical considerations intersect. Courts and disciplinary boards evaluate conflicts based on factors such as the timing of the conflicting interests, the scope of confidential information involved, and whether adequate safeguards can be implemented to protect all parties’ interests.

To better understand what constitutes suing for conflict of interest, let’s examine the following examples:

Representing both sides in a divorce or business dispute

One of the most clear-cut attorney conflict of interest examples involves dual representation in adversarial proceedings. When a lawyer attempts to represent both spouses in a divorce or both parties in a business dispute, they create an impossible situation where they cannot zealously advocate for either client.

Even in seemingly amicable divorces, interests inevitably diverge on issues like property division, custody, or support payments. The lawyer cannot provide independent advice to each party or negotiate aggressively on behalf of one client without potentially harming the other.

This type of conflict is particularly problematic because it violates the fundamental principle that attorneys must provide undivided loyalty to their clients. Courts consistently hold that such dual representation is inherently prejudicial, regardless of whether the clients initially consented to the arrangement.

Suing a current or former client without proper consent

Taking legal action against a current or former client without obtaining proper waivers creates a significant ethical violation. This situation often arises when law firms grow larger, and different attorneys within the firm may not be aware of existing or past client relationships. The conflict becomes even more complex when the new matter is substantially related to the previous representation, as this may involve using confidential information against the former client.

How do you prove conflict of interest in these situations? Documentation is key — client intake records, retainer agreements, and case files can establish the timeline and scope of previous representations. Courts will examine whether the matters are substantially related and whether confidential information could be used to the former client’s disadvantage.

Personal financial interest in a client’s case

When attorneys have a personal financial stake in the outcome of their client’s case, it creates a legal conflict of interest that can compromise their professional judgment. This might involve:

• Owning stock in a company that the client is suing.
• Having investments that would benefit from a particular outcome.
• Entering into contingency fee arrangements that create perverse incentives.
• Getting upside down financially on the case with expenses and/or fee interests such that it may now be in the lawyer’s best interest to settle the case, but better for the client to go to trial and reject the settlement
• Representing multiple clients, and not disclosing a conflict between/among them so that the attorney can continue to represent all of them (thereby making a bigger fee), rather than disclosing the conflict and advising one or more of the clients to seek independent counsel.
• Using “case funding” or “lending companies” to cover the client’s case expenses, rather than funding the case expenses themselves, thereby subjecting the client to huge interest rates, or where the lawyer has/owns an interest in the funding company that is not disclosed to the client.

The attorney’s personal financial interests may lead them to make strategic decisions that benefit themselves rather than their client.

These conflicts are particularly insidious because clients may not be aware of their attorney’s financial interests. Professional conduct rules require lawyers to disclose such interests and often prohibit representation entirely when the financial stake is significant enough to affect judgment.

Opposing a client when a family member benefits

Family relationships can create subtle but significant conflicts of interest that may not be immediately apparent. When an attorney’s spouse, child, or other close family member stands to benefit from an outcome adverse to the client, the lawyer’s ability to provide zealous representation becomes compromised. This type of conflict often emerges in business litigation, real estate transactions, or estate planning matters.

The challenge with family-related conflicts is that they may develop during the course of representation as circumstances change. Attorneys have an ongoing duty to monitor for such conflicts and withdraw from representation when they arise, even if it means disrupting the client’s case at a critical juncture.

Representing a client against a former firm client

Law firm mobility and lateral hiring have made this a common type of legal malpractice conflict. When attorneys change firms, they may unknowingly take on cases that oppose their former firm’s clients, creating potential conflicts based on confidential information obtained during their previous employment. Even if the attorney did not personally work on matters for the former client, they may have gained access to confidential information through firm meetings, shared files, or casual conversations.

These conflicts require careful analysis of the scope of previous representation, the nature of confidential information obtained, and whether appropriate screening measures can be implemented. Courts increasingly scrutinize these situations, particularly in high-stakes commercial litigation where firms compete aggressively for clients.

Unfair business deals with a client

The attorney-client relationship creates a fiduciary duty that extends beyond legal representation to any business dealings between lawyer and client. When attorneys enter into business transactions with clients, they must ensure the arrangement is fair, fully disclosed, and that the client has independent counsel to review the transaction. Violations occur when lawyers use their position of trust or confidential client information to gain unfair advantages in business deals.

Common examples include:

• Lawyers purchasing client property at below-market prices
• Entering into investment partnerships using client funds
• Acquiring interests in client businesses without proper disclosure and consent

These arrangements are heavily scrutinized because of the inherent power imbalance in the attorney-client relationship.

Learn more: When is it too late to fire your attorney?

How do you prove conflict of interest?

The burden of proof for a legal malpractice case typically falls on the party alleging the conflict. To strengthen your case, you’ll want to gather concrete evidence that demonstrates your attorney’s competing loyalties or interests that materially affected their representation, including:

• Client intake records and retainer agreements: These documents establish the timeline of attorney-client relationships and can reveal overlapping or conflicting representations.
• Court filings and case records: Official court documents show when an attorney appeared for opposing parties or took positions adverse to former clients in related matters.
• Financial records and disclosure statements: Bank records, investment portfolios, and required conflict disclosure forms can reveal undisclosed financial interests in case outcomes.
• Email communications and internal firm correspondence: Electronic communications often contain admissions or discussions about potential conflicts that attorneys failed to address properly.
• Witness testimony from former clients or colleagues: First-hand accounts can establish the scope of confidential information shared and how it may have been misused.
• Expert testimony on professional standards: Legal ethics experts can explain how the attorney’s conduct violated professional rules and industry standards.
• Evidence of adverse case outcomes: Documentation showing how the conflict directly resulted in poor legal strategy, missed opportunities, or unfavorable settlements.

The strength of your evidence will determine whether you can pursue disciplinary action, seek malpractice damages, or potentially overturn unfavorable legal outcomes that resulted from your attorney’s divided loyalties.

Don’t let your attorney’s divided loyalties cost you the case. Call Sears Crawford today!

When your lawyer’s conflicting interests compromise your legal representation, waiting only makes the situation worse. Evidence disappears, witnesses forget crucial details, and statutes of limitations tick away while you remain unaware of what constitutes a conflict of interest that may have derailed your case.

Ross Sears has built his practice on holding attorneys accountable when their professional lapses harm clients. From the lawyer conflict of interest examples we’ve discussed to more complex ethical violations, we have the resources needed to investigate, document, and pursue the compensation you deserve.

Don’t let a conflicted attorney’s poor judgment become your permanent loss. Contact Ross Sears at Sears Crawford today at (713) 223-3333 for a free and confidential consultation about your potential legal malpractice claim.

More Helpful Articles by Sears Crawford: 

• What to Do if Your Attorney Steals Your Settlement
• When Do You Need a Conflict of Interest Lawyer?
• Four Elements of Legal Malpractice in Texas
• Texas Rules of Professional Conduct for Lawyers
• How Do You Sue a Lawyer for Legal Malpractice?