Understanding the “Substantial Risk”

by Mayland McKimm, QC

While, generally speaking, the rules and principles regarding conflict of interest develop around the intricacies and Byzantine relationships found in the major transnational and multinational law firms, it is in the actual experience of the profession that conflicts of interest are most profoundly focused and acutely felt at the level of the small office and in rural communities. Indeed it is in these work places that lawyers are most acutely aware that conflicts which preclude their representation of valued clients are both bad for the public interest, bad for the justice system and bad for business. With this issue sharply in mind a task force of the Canadian Bar Association has set about to critically analyse and in some sense restate the law of conflicts of interest in our profession and the application of rules to best protect counsel and the public from the adverse effects of conflicts of interest.

In a report prepared for the Canadian Bar Association and presented to the National Council in August, 2008 (refer to the cover story) the Task Force on Conflicts of Interest conducted a thorough and encompassing review of this troublesome area of the law. For those in practice the work is an excellent read and it has been presented both in a manner that is easily digestible and practically focused. Perhaps of greatest utility to the profession is the conflicts of interest “tool kit” found at the back of that report. For this tool kit alone all members of our profession should find the report essential reading as they move their practices forward.

Counsel should commend themselves to the analytical framework found within the report, titled; How to analyze a potential conflict of interest. Those of us in practice often feel that we will simply know that a conflict exist in our representation of a new or existing client. A client arrives in the office, begins to present their legal problem and counsel begins to undertake significant work on their behalf, this may include the preparation of pleadings, the preparation of documents and the gathering of information. In the small office lawyers tend to be more immediately focused on serving the client and in the struggle to serve as many clients as well as possible, office systems can fall into disuse. Sadly, the real risk to the small office practitioner is that, after doing substantial work without engaging a conflicts analysis, counsel may well find themselves without a client and all of their work having effectively been wasted and of no value to either themselves as billable or to their clients as a useful resolution to their legal problems.

The task force report also presents a series of excellent check lists, retainer and termination letters to cover many eventualities both in the sense that a conflict may arise or to ensure that conflicts do not arise. Counsel must always be mindful to engage in a conflicts analysis during that critical first interview. To ask precise questions of either the new or existing client just what parties may be engaged in the litigation or engaged in the transaction and how those parties may relate to other parties or other clients of either the small firm or indeed even the sole practitioner.

The Canadian Bar Association is to be substantially commended once again for putting such an enormous amount of volunteer effort into such a fundamental area of the practice of law. The task now falls to we in the profession to ensure that we make the highest and best use of this excellent work and take the time to assess the report and see what steps we can all take to improve our practice.

Mayland McKimm, QC, Lawyer, McKimm & Wishart

This article was published in the December 2008 issue of BarTalk. © 2008 The Canadian Bar Association. All rights reserved.