Nostradamus, Esquire? -- Making the Enforceability of Advance Conflict Waivers by Sophisticated, Independently Represented Clients More Predictable for Non-Clairvoyant Lawyers

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Originally published in NEW JERSEY LAWYER | December 2011 WWW.NJSBA.COM.

Gone are the days when the predominant business model in the profession was individual lawyers or small law firms representing clients of relative lesser sophistication, servicing all of the client’s legal needs. Increasingly, the market for legal services has become dominated by larger, more sophisticated clients, especially large corporations, frequently with in-house legal staffs. These larger, more sophisticated clients often have widespread business operations and a great variety of diverse legal problems. No longer do these clients look to a single law firm, much less a single lawyer, to satisfy all of their legal needs. These clients routinely hire different law firms, in different jurisdictions, with competence in different areas of law. They also frequently have and exercise significant bargaining power in the discussions relating to the business terms of an engagement with outside counsel, as well as access to the advice of independent counsel in negotiating and agreeing to those terms.

These developments in the market for legal business have had a dramatic impact on law firms. In response to the expanding business needs of clients, law firms themselves have grown both geographically and in the scope of their practices. They are now frequently widespread organizations representing many corporate clients, often on discrete matters that have little or no impact on other aspects of the corporation’s diverse operations. These changes on both sides of the equation in the practice of law have resulted in a proliferation of potential lawyer-client conflicts, many in situations where the core values of loyalty and confidentiality are not threatened in the same direct and serious way they were when the canons and rules were adopted and the predominant business model was very different.

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