RPC 1.8 - Conflict of Interest: Current Clients: Specific Rules

• Proposed Changes to RPC 1.8 - Conflict of Interest: Current Clients: Specific Rules (in Word Format)
• Comments Received for RPC 1.8 - Conflict of Interest: Current Clients: Specific Rules

GR 9 COVER SHEET
Suggested Amendment to
RULES OF PROFESSIONAL CONDUCT (RPC)
RPC 1.8: CONFLICT OF INTEREST: CURRENT CLIENTS: SPECIFIC RULES

Submitted by the Board of Governors of the Washington State Bar Association

Purpose: The suggested amendment to RPC 1.8 is intended to classify as a specific conflict of interest, and thereby prohibit, a public defense contract between a lawyer and a governmental entity that obligates the contracting lawyer or law firm to bear the expense of obtaining conflict counsel or to bear the cost of obtaining investigative or expert services out of the general proceeds of the contract. Many public defense contracts in Washington have been structured as lump sum agreements, forcing the contracting lawyers to decide whether funds that would otherwise be kept as compensation should be applied to paying outside counsel when a conflict of interest arises or to pay for investigative and/or expert services. This type of contract structure has been recognized as creating a conflict of interest. See WSBA Informal Ethics Opinion No. 1647 (conflict of interest issues under RPC 1.7 and 1.9 exist in requiring public defender office to recognize a conflict and hire outside counsel out of its budget). Because this is a specific, situational conflict of interest, it is appropriate to expressly identify it as such in Rule of Professional Conduct 1.8, so that lawyers will be aware of the ethical prohibition even if local governments proffer such contracts.

Additional background and rationale for the amendment is set forth in the Washington Comments subjoined to the Rule, which are reiterated here as an explanation of purpose.

Where there is a right to a lawyer in court proceedings, the right extends to those who are financially unable to obtain one. This right is effected in some Washington counties and municipalities through indigent defense contracts, i.e., contracts entered into between lawyers or law firms willing to provide defense services to those financially unable to obtain them and the governmental entities obliged to pay for those services. When a lawyer or law firm providing indigent defense services determines that a disqualifying conflict of interest precludes representation of a particular client, the lawyer or law firm must withdraw and substitute counsel must be obtained for the client. See Rule 1.16. In these circumstances, substitute counsel is typically known as “conflict counsel.”

An indigent defense contract by which the contracting lawyer or law firm assumes the obligation to pay conflict counsel from the proceeds of the contract, without further payment from the governmental entity, creates an acute financial disincentive for the lawyer either to investigate or declare the existence of actual or potential conflicts of interest requiring the employment of conflict counsel. For this reason, such contracts involve an inherent conflict between the interests of the client and the personal interests of the lawyer. These dangers warrant a prohibition on making such an agreement or accepting compensation for the delivery of indigent defense services from a lawyer that has done so. See WSBA Informal Ethics Opinion No. 1647 (conflict of interest issues under RPC 1.7 and 1.9 exist in requiring public defender office to recognize a conflict and hire outside counsel out of its budget); ABA Standards for Criminal Justice, Std. 5-3.3(b)(vii) (3d ed. 1992) (elements of a contract for defense services should include “a policy for conflict of interest cases and the provision of funds outside of the contract to compensate conflict counsel for fees and expenses”); People v. Barboza, 29 Cal.3d 375, 173 Cal. Rptr. 458, 627 P.2d 188 (Cal. 1981) (structuring public defense contract so that more money is available for operation of office if fewer outside attorneys are engaged creates “inherent and irreconcilable conflicts of interest”).

For these reasons, suggested paragraph (m) specifies that it is a conflict of interest for a lawyer to enter into or accept compensation under an indigent defense contract that does not provide for the payment of funds, outside of the contract, to compensate conflict counsel for fees and expenses.

Similar conflict-of-interest considerations apply when indigent defense contracts require the contracting lawyer or law firm to pay for the costs and expenses of investigation and expert services from the general proceeds of the contract. Paragraph (m)(1)(ii) prohibits agreements that do not provide that such services are to be funded separately from the amounts designated as compensation to the contracting lawyer or law firm.