The New Era of Conflict Checks for Law Firms

The New Era of Conflict Checks for Law Firms

We’re in a new era of law firm conflict check management. Now that legal technology can help firms swiftly identify and resolve potential conflicts, courts and clients expect greater accuracy and transparency than ever before. 

In fact, conflict of interest is the most cited legal malpractice error year after year, driving higher insurance premiums and costing law firms millions of dollars in fines and lost work. In considering the following information and tips, you can help your firm conduct thorough and reliable conflict checks faster and avoid costly mistakes.

What’s changing about conflict checks in law firms?

First, law firms are using better legal software can that improves the processes for conducting conflict checks and communicating search results. They are choosing technology that adds higher levels of precision and speed over the manual practices of the past and lends more credence to results.

Second, law firms have been rethinking their operations, leading some to form new business models, such as:

  1. The Swiss Verein model, in which a network of related law firms shares common interests.
  2. International firms operating through multiple entities.
  3. Virtual law firms with members distributed across the globe.
  4. US states exploring nonlawyer ownership of law firms.

Questions about how to define a “single” law firm can significantly affect a firm’s responsibilities and obligations when it comes to conflict checking. For example, the law firm Dentons uses a Swiss Verein structure, treating its offices in other countries as separate entities. However, an appeals court recently upheld the disqualification of Dentons’ U.S. arm from representing a client because it failed to disclose conflicts related to its counterpart, Dentons Canada.

Dentons argued that each office serves distinct markets. But the court ruled that Dentons' verein functioned as a single business that should check for conflicts throughout its entire network. The $32 million verdict against Dentons suggests that all law firms must develop rigorous and comprehensive conflict-checking systems.

How to Optimize Your Conflict Check Process

By evaluating your law firm’s conflict check process from beginning to end, you can determine which steps could be automated and streamlined for improved accuracy. 

1. Set the foundation for thorough—yet super speedy—client conflict checks.

Typically, before a firm agrees to take on a new client, or a new matter for an existing client, an administrator sends a firmwide email that includes basic client and matter details and asks recipients to reply with any conflicts. This method is susceptible to human error such as oversight and neglect.

Ideally, your firm’s software programs will fully integrate to clear the way for a digital search across all data sources such as email, contact, timekeeping, accounting, CRM, and document management systems. However, it’s difficult to accomplish this level of interoperability across disparate software tools. IT teams can spend a lot of time and money trying, but the results still may not be reliable.

Only an all-in-one legal practice management platform allows you to perform a single conflict check that reaches all your data sources. Multiple offices can share information across a cloud-based system for comprehensive conflict checks you can feel confident in. A cloud-based practice management system with a built-in conflict check functionality can also ensure distributed offices adhere to the strictest rules and ethical guidelines in every check.

2. Software features let you fine-tune your conflict check searches.

An all-in-one platform with built-in conflict check functionality allows you to type in a name or a keyword, click a button, and instantly pull up any potential conflicts. While you want to be able to search all your data sources, you also don’t want to be inundated with irrelevant results.

You can fine-tune your search with features that let you modify your search criteria and select specific sources to check. The ability to click hyperlinked results to discover more details helps you quickly understand the context of a potential conflict and easily identify who to work with to handle it. Meanwhile, customizable permissions protect confidential client data.

3. Permanently record your conflict checks.

As a safeguard, keep a permanent record of each conflict check. Look for a practice management system that allows you to export results to a PDF document or an Excel spreadsheet. This record should include the date and time of the search and show the names, search terms, and parameters selected. Attach the record to the associated matter or contact file to refer to any time.

4. Handle each conflict of interest efficiently.

Warn the client about a potential conflict. Give them enough information to make an informed decision. If all parties agree to look past the conflict, get the client’s written consent through a signed conflict waiver.

Often, it’s best to recommend that the client seek other counsel. Send a non-engagement letter explaining that they should look elsewhere for legal assistance. Be helpful and warn them of any relevant time constraints.

Take the Next Step

Using Actionstep, you can automate the key steps in the conflict check process, from the initial collection of information from a prospective client to creating and sending the conflict waiver or non-engagement letter for e-signature. Talk to our team today to find out how a modern, all-in-one legal practice management platform can help you stay on top of every aspect of your practice.

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Written by The Actionstep Team