Conflicts of Interest Database Builder & Checker

Overview

Advanced conflict of interest checking system covering Rules 1.7-1.10 of the ABA Model Rules of Professional Conduct. Screens for direct adversity, substantial relationship conflicts, and imputed conflicts. Reduces conflict check from 3 hours to 15 minutes (92% savings). Generates conflict waiver letters and maintains conflicts database with comprehensive search capabilities.

ABA Model Rules Coverage

Rule 1.7: Concurrent Conflicts of Interest

Direct Adversity Test:

• Cannot represent client directly adverse to another current client
• Exception: Informed consent, confirmed in writing
• Reasonably believes can provide competent and diligent representation

Material Limitation Test:

• Cannot represent if materially limited by responsibilities to another client
• Examples: Business transaction between two clients, family law matters affecting related parties
• Same exception: Informed consent

Rule 1.8: Specific Current Client Conflicts

Prohibited Transactions:

• Business transactions with clients (unless fair terms + written disclosure)
• Using client information to disadvantage client
• Soliciting substantial gifts from clients
• Literary/media rights about representation (during representation)
• Financial assistance to client (limited exceptions)
• Aggregate settlements (multiple clients - all must consent)
• Limiting malpractice liability (prospective agreement prohibited)
• Sexual relationships with clients (if not pre-existing)

Rule 1.9: Former Client Conflicts

Substantial Relationship Test:

• Cannot represent client with interests materially adverse to former client
• Only if matter is "same or substantially related"
• Cannot use confidential information to former clients disadvantage

Same Matter Test:

• Absolutely cannot switch sides in same matter
• Example: Represented plaintiff in litigation, cannot later represent defendant

Rule 1.10: Imputed Conflicts (Firm-Wide)

General Rule: One lawyers conflict = entire firms conflict

Exceptions (Screening):

• Former government lawyer (with screening + notice)
• Former judge/arbitrator (with screening + notice)
• Lawyer moving from firm (if no confidential information + screening)

Lateral Hire Screening Requirements:

• Timely written notice to affected client
• No fee sharing from matter
• Physical/technological barriers to prevent information sharing
• Written confirmation of screening procedures

Conflict Check Process

Stage 1: Initial Intake (Automated)

Information Gathered:

• Prospective client name (individual or entity)
• Adverse parties (all known parties)
• Nature of matter (litigation, transactional, advisory)
• Related entities (parent companies, subsidiaries, affiliates)
• Key individuals (officers, directors, shareholders >10%)
• Opposing counsel

Database Searches:

• Current client database (by name, alias, DBA)
• Former client database (past 7-10 years)
• Adverse party database
• Related entity database
• Family relationship database (for family law matters)

Stage 2: Conflict Analysis (AI-Powered)

Direct Adversity Check:

• Is prospective client directly adverse to current client?
• Example: Suing current client, opposite side of transaction
• Result: CONFLICT FOUND → Waiver required or decline representation

Substantial Relationship Analysis:

• Is matter same or substantially related to former client representation?
• Factors: Same legal issues, same facts, overlapping time periods, confidential information use
• Result: CONFLICT FOUND if substantially related

Positional Conflicts:

• Same legal issue, opposite positions (not same matter/client)
• Example: Arguing for interpretation of law in one case, opposite in another
• Result: May be waivable depending on circumstances

Imputation Analysis:

• Check all firm lawyers for individual conflicts
• Apply screening analysis for lateral hires
• Check conflicts at affiliated offices (if applicable)

Stage 3: Waiver Assessment

Waivabiable Conflicts:

• Direct adversity (if reasonable belief of competent representation)
• Concurrent conflicts with material limitation
• Some former client conflicts (if no confidential information at issue)

Non-Waivable Conflicts:

• Cannot provide competent/diligent representation
• Prohibited by law (e.g., representing both parties in criminal case)
• Assertion of claim by one client against another in same litigation

Waiver Requirements:

• Full disclosure of conflict
• Explanation of risks and alternatives
• Independent judgment assessment
• Informed consent in writing (signed by client)

Stage 4: Documentation

Conflict Memo:

• Parties and matter description
• Conflicts identified
• Waiver analysis
• Recommendation (accept with waiver, decline, screen)

Conflict Waiver Letter (if applicable):

• Description of conflict in plain language
• Risks of conflict to client
• Alternative options (separate counsel)
• Confirmation that client understands and consents
• Signature line for client

Database Structure

Client Records

Current Clients:

• Client name (legal name and all DBAs/aliases)
• Matter numbers and descriptions
• Date representation began
• Responsible attorney
• Practice area
• Client type (individual, corporate, government)
• Related entities
• Key contacts

Former Clients:

• Same information as current clients
• Date representation ended
• Final matter disposition
• Retention period (typically 7-10 years in conflicts database)

Adverse Party Records

• Name of adverse party
• Relationship to client matter
• Opposing counsel
• Cross-reference to client matter

Related Entity Records

• Parent companies
• Subsidiaries
• Affiliates
• Ownership relationships (>10% ownership)
• Officer/director overlap

Family Relationship Database (Family Law)

• Spouse/former spouse
• Children
• Parents
• Siblings
• Extended family (for estate planning)

Advanced Search Capabilities

Fuzzy Name Matching

• Spelling variations (John vs. Jon, Smith vs. Smyth)
• Name order variations (First Last vs. Last, First)
• Corporate suffix variations (Inc. vs. Incorporated vs. Corp.)
• Punctuation/spacing differences

Wildcard and Proximity Searches

• Partial name matching (Sm* finds Smith, Smythe, etc.)
• Proximity searches (words within X words of each other)

Related Entity Expansion

• Automatically searches parent/subsidiary relationships
• Checks corporate family tree (3+ levels deep)
• Identifies officer/director conflicts

Industry/Sector Conflicts

• Identifies all clients in same industry
• Useful for checking trade secret/competitive conflicts
• Example: Representing two competitors in unrelated matters

Conflict Waiver Letter Generation

Concurrent Conflict Waiver (Rule 1.7)

Template Includes:

• Description of both clients and matters
• Explanation of how interests are directly adverse or materially limited
• Risks to each client from joint representation
• How firm will maintain confidentiality between clients
• Client acknowledgment and consent signature

Former Client Conflict Waiver (Rule 1.9)

Template Includes:

• Description of former representation
• Substantial relationship analysis
• Confidential information safeguards
• Former clients acknowledgment that no confidential information will be used against them

Corporate Family Conflict Waiver

Template Includes:

• Organizational chart showing relationships
• Explanation of how parent/subsidiary interests may diverge
• Statement about separate representation and confidentiality
• Each entitys independent consent

State-Specific Variations

California Rule 1.7

• More restrictive than ABA Model Rule
• "Significant risk" standard (lower threshold than "material limitation")
• Requires written disclosure even for waivabiable conflicts

New York Rule 1.7

• Follows ABA Model Rule closely
• Specific guidance on insurance defense conflicts
• Positional conflicts more liberally allowed

Texas Rule 1.06

• Combined Rule 1.7 and 1.9 provisions
• "Materially and adversely affected" standard
• Written consent required (not just informed consent)

Florida Rule 4-1.7

• Written consent required for all conflicts
• No oral waivers permitted
• Specific provisions for insurance defense

Multi-State Practice:

• Tool applies most restrictive rule when firm practices in multiple states
• Flags state-specific conflict issues
• Generates state-appropriate waiver language

Special Conflict Situations

Insurance Defense

Tripartite Relationship:

• Lawyer hired by insurer, represents insured
• Conflicts between insurers interest (minimize payout) and insureds interest (full coverage)
• Reservation of rights letters trigger conflict analysis

Common Conflicts:

• Coverage dispute between insurer and insured
• Insurers coverage limits < potential liability
• Multiple insureds with divergent interests

Government Lawyers (Former Government Service)

Rule 1.11 Analysis:

• Matter participation test (personally and substantially involved?)
• Confidential government information test
• Screening requirements (if moving to private sector)
• Written notice to government agency

Judges and Arbitrators

Rule 1.12 Analysis:

• Personal and substantial participation in matter
• 1-year cooling-off period in some jurisdictions
• Screening and notice requirements
• Disqualification of former law firm (unless screened)

Family Law Conflicts

Joint Representation of Spouses:

• Allowed only in limited circumstances (uncontested, no children, agreement on all issues)
• Full disclosure of risks
• Separate representation strongly recommended

Prior Representation of One Spouse:

• Cannot later represent other spouse in divorce
• Cannot represent one spouse if previously represented couple jointly

Corporate Family Conflicts

Parent-Subsidiary Representation:

• Generally no conflict if interests aligned
• Conflict arises if interests diverge (derivative suit, regulatory action against one entity)

Affiliates and Joint Ventures:

• Check ownership percentages
• Analyze governance and control
• Assess potential for divergent interests

Conflicts Committee Workflow

Weekly Conflicts Meeting

Agenda Items:

• New matter conflict checks (past week)
• Pending waiver requests
• Lateral hire screening updates
• Client relationship changes (M&A, spin-offs)
• Significant business conflicts

Conflicts Partner/Committee Responsibilities

• Final authority on conflict waiver decisions
• Review of AI-generated conflict analyses
• Judgment calls on waivability
• Risk assessment (reputational, malpractice, disqualification)

Escalation Triggers

Automatic Escalation to Committee:

• Direct adversity to significant client (top 20% revenue)
• Government conflict (former government lawyer)
• Judge/arbitrator conflict
• Media/publicity sensitive matter
• Bet-the-company litigation

Malpractice Risk Mitigation

Common Malpractice Scenarios Prevented

• Failure to identify conflict before filing (disqualification risk)
• Inadequate conflict waiver (not informed consent)
• Using confidential information against former client
• Switching sides mid-representation
• Imputed conflict not identified (lateral hire)

Documentation Best Practices

✓ Conflict check memo for every new matter ✓ Conflicts committee meeting minutes ✓ Signed waiver letters (if applicable) ✓ Annual conflicts database audit ✓ Lateral hire screening documentation ✓ Client relationship changes tracked in real-time

Time Savings Breakdown

| Conflict Check Task | Manual Process | Automated Tool | Savings | |---------------------|---------------|----------------|---------| | Database searches (current clients) | 30 min | 2 min | 28 min | | Database searches (former clients) | 30 min | 2 min | 28 min | | Related entity research | 45 min | 3 min | 42 min | | Conflict analysis and memo | 60 min | 5 min | 55 min | | Waiver letter drafting (if needed) | 30 min | 2 min | 28 min | | Conflicts committee review | 15 min | 1 min | 14 min | | Total | 3 hours 30 min | 15 min | 2 hr 45 min (92%) |

ROI Analysis

For mid-sized law firm (50 lawyers, 1,000 new matters/year):

• Time savings: 2,750 hours/year × $350/hour = $962,500/year
• Malpractice risk reduction: ~$100,000/year (conservative estimate)
• Disqualification motion defense: $50,000/year (avoided)
• Total annual benefit: $1,112,500
• Skill cost: $69
• Annual ROI: 1,612,218%

For solo practitioner (100 new matters/year):

• Time savings: 275 hours/year × $300/hour = $82,500/year
• Skill cost: $69
• Annual ROI: 119,465%

Regulatory and Ethics Compliance

State Bar Audits:

• Many states require conflicts check documentation
• Demonstrates reasonable procedures to identify conflicts
• Protects against negligence claims

ABA Formal Opinions:

• Formal Opinion 16-474: Screening lateral hires
• Formal Opinion 95-390: Conflicts in electronic databases
• Formal Opinion 05-434: Corporate family conflicts

Restatement (Third) of the Law Governing Lawyers:

• § 121: Substantial relationship test
• § 122: Imputed conflicts
• § 124: Screening procedures

Advanced Features

Predictive Conflict Analysis

• Flags potential future conflicts based on client industries
• Alerts when client in M&A (acquirer/target conflicts)
• Monitors regulatory actions affecting clients

Business Conflicts (Non-Legal)

• Competitive intelligence concerns
• Client A doe snot want firm representing Client B (competitor)
• Reputational conflicts (controversial clients/matters)

Pro Bono Conflicts

• Separate analysis for pro bono vs. paying client conflicts
• Some jurisdictions allow more liberal conflict waivers for pro bono

Prospective Client Conflicts (Rule 1.18)

• Confidential information from prospective client
• Cannot use against prospective client
• Screening may cure conflict

Integration with Practice Management Systems

Compatible Platforms:

• Clio
• PracticePanther
• MyCase
• Smokeball
• AbacusLaw
• ProLaw

Automated Workflows:

• Conflict check triggered when new matter opened
• Auto-population of client/matter details
• Real-time conflicts alerts
• Calendar reminders for annual reviews