Why Is DOJ Trying to Unfairly Disqualify Defense Counsel for “Conflicts”?

Group of hands with pointing fingerBy Sara Kropf

There seems to be a disturbing trend by Department of Justice attorneys to encourage defense counsel to disqualify themselves based on a supposed “conflict of interest” without disclosing to defense counsel why the prosecutor thinks a conflict exists.

Let me explain how this issue arises.

In a grand jury investigation involving a company, the government may be simultaneously investigating the company and some combination of its directors, officers, or employees. The company retains outside counsel to represent it in the investigation. As part of that retention, outside counsel conducts an internal investigation and interviews the key people to find out what happened.

That’s all simple enough.

But then the prosecutor says he wants to interview a particular director, one who doesn’t appear to have had a role in any potential wrongdoing. Can the same outside counsel represent the director during the interview?

Basics of Conflict of Interest for a Corporate Entity

You’ll need to check your own jurisdiction’s rules of professional conduct. Let’s look at the ABA Model Rule 1.13(b) as an example, though. It says:

A lawyer representing an organization may also represent any of its directors, officers, employees, members, shareholders or other constituents, subject to the provisions of Rule 1.7. If the organization’s consent to the dual representation is required by Rule 1.7, the consent shall be given by an appropriate official of the organization other than the individual who is to be represented, or by the shareholders.

A lawyer representing multiple clients in a single matter must, of course, be mindful of the limitations of this type of representation. Model Rule 1.7 does not allow it if

(1) the representation of one client will be directly adverse to another client; or

(2) there is a significant risk that the representation of one or more clients will be materially limited by the lawyer’s responsibilities to another client, a former client or a third person or by a personal interest of the lawyer.

The safest bet in any criminal investigation is not to represent multiple parties under investigation. It’s (pretty much) impossible to represent two targets in an investigation and can be a serious problem to represent two subjects. But what about a subject and a witness?

If there is an actual conflict—one client’s interests are adverse to the other—then the rule is clear: you can’t represent both clients. But Rule 1.7(a)(2) leaves some gray area for when the representation of one client will “materially limit” the representation of the other client.

How to Decide If There Is a Conflict?

To determine if there is a conflict, you need to investigate it. To do that, you need the facts. You need to know what each client would say, what they know about the situation, perhaps their motivations to explain their own conduct.

When you conduct the internal investigation for the company, even a preliminary one, you should ask questions to find out this information to determine if you have a conflict.

Why Am I Complaining about DOJ?

What I’ve seen in my practice and what I’ve heard from other defense lawyers is that some U.S. Attorney’s Offices are pressuring them to disqualify themselves from representing the company and an officer/director/employee.

For example, the prosecutor will tell company counsel that he wants to interview certain directors and that the prosecutor believes there is a conflict between the company counsel and the directors, so the same lawyer cannot represent the director in the interview.

If a prosecutor knows of a conflict for defense counsel, maybe there is an obligation for the prosecutor to raise it once the case is in court. It’s not at all clear how this general rule applies during the investigative stage.

This interesting blog post from 2015 has a chart that summarizes the reasons for seeking disqualification in federal court from about 2003 to 2012. You’ll see that one of the most common reasons is a conflict among current clients.

DIsqualification

What I’ve found frustrating is when a prosecutor tells me I have a conflict but won’t tell me why he thinks I have one. All the prosecutor says is “You can’t represent Director Smith.”

The fact is, that’s not the prosecutor’s damn job. It’s my job as the lawyer for my clients to determine if and when I have a conflict and to discuss it with my client. Clients can also waive conflicts.

If the prosecutor won’t give me the facts underlying his demand that I disqualify myself from representing a client, then all I can do is rely on the facts that I know. And if those facts show that there’s no conflict, then I can ethically represent both clients.

(Of course, I will discuss all of this with my client.)

The fact is, if the governments tells me I can’t represent a client but won’t tell me why, then I’m suspicious that it’s a valid reason. There are always times when our clients don’t tell us the whole story. I’m more than willing to listen to the prosecutor’s explanation for why there may be a conflict and then discuss it with my client to evaluate whether there is one.

A prosecutor who tries to tell me who to represent—without telling me the basis for the demand—strikes me as someone who is trying to gain a strategic advantage, not to enforce the rules of professional conduct. The government would prefer not to have everyone aligned on the other side of the table. A house divided and all that.

Ultimately, this is the client’s call to make with my advice. It may be the safer course to indemnify officers and directors (or pay for employee counsel outright) rather than irritate the prosecutor. As defense counsel, you need to explain the upsides and downsides to permitting company counsel to represent other clients in the investigation. Obtaining separate counsel for these parties may show the prosecutor that you are willing to cooperate fully.

But it is also expensive and prosecutors (particularly those who haven’t been in private practice) never seem to think about this fact. For a smaller company, this is a serious consideration.

What you shouldn’t do as a defense lawyer is simply say yes. Ask the prosecutor to explain why he thinks there is a conflict, what facts support a conflict, how serious the conflict is. Find out whatever you can before you talk with your client to make a final decision.

To wit: Follow the rules of professional conduct, talk to your client the whole time, and don’t roll over.

This entry was posted in DOJ policy and practice, Ethics. Bookmark the permalink.

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