I just discovered “Dear Ethics Lawyer” from Mark Hinderks at Stinson. Here’s an interesting recent piece on: “Positional Conflicts” —

• “Q: Dear Ethics Lawyer, I am handling a significant case in which I am preparing to argue to a federal district court in our state that a state law cause of action against our client under relatively recent legislation is preempted by federal law. I’ve just learned that one of my partners in the firm is coincidentally preparing to argue in state court on behalf of a different client that preemption does not apply.”
• “I discovered this by accident, given that our firm (similar to other firms) does not track the specific legal arguments being made over time in individual cases as part of its conflict-checking system. Now that I know about it, what do I do? Is this an actual conflict, or something that will just be difficult to explain to the clients if they find out we are arguing both sides of the same argument at the same time?”
• “A: Positional or issue conflicts occur when a lawyer (or firm) is advocating a substantive position in one matter that could be detrimental to the interests of another client in a different matter. This situation raises questions such as whether the first decision rendered will be persuasive or even binding precedent affecting the other case; whether the judge(s) will discount the lawyers’ advocacy knowing the firm is on both sides of the issue; and whether the clients will be concerned by, or even subject to divided loyalties of the lawyers involved?”
• “The issue is dealt with to a certain extent in Model Rule 1.7, Comment 24, which states that ordinarily ‘a lawyer may take inconsistent legal positions in different tribunals at different times on behalf of different clients,’ and that the ‘mere fact’ that precedent might be created adverse to the interest of a client in an unrelated matter does not create a conflict of interest. If, however, there is a significant risk that the advocacy for one client will materially limit the lawyer’s effectiveness for another client in a different case, then a conflict will exist.”
• “Formal Ethics Op. 93-377 (1993) also looks at the issue primarily in the framework of a material limitation conflict under Rule 1.7(a)(2). Is the importance of the issue likely to affect the ultimate outcomes? Is the determination in one case likely to have a significant impact on the determination in the other? Will there be any ‘inclination by the lawyer, or her firm, to ‘soft pedal,’ de-emphasize or alter certain arguments to avoid impacting the other case?’ It concludes on the one hand that a conflict does exist when a lawyer or firm argues opposing substantive positions in the same jurisdiction at the same time; and on the other hand that no conflict exists when the matters are not litigated in the same jurisdiction and there is no substantial risk that either representation will be adversely affected by the other. Of course, there is a huge gray area between these two outcomes, in which the lawyer(s)/firm involved must examine the factors referenced above as to whether a material limitation conflict exists.”
• “There is also the matter of whether the matter should be disclosed to affected clients, especially if the decision is to proceed with both representations. As a practical matter, disclosure and consent (where disclosure may be made, and consent obtained under Rule 1.7(b)) may cure both any actual conflict of interest and inoculate the firm against client surprise and disappointment upon learning its lawyer or firm is arguing a position adverse to its interest.”
• “In the situation you describe above, the two matters are not in the same jurisdiction (one is in state court, the other federal), but are in the same state, where decisions of state and federal courts on a legal issue are likely to have significant influence, one upon the other. You should consider whether either representation is likely to adversely affect the other given the importance of the issue involved, and whether there is any other material limitation on the ability of you and your partner to vigorously present your arguments in the interests of your respective clients, and to have them fairly received by the courts involved. The safe route is either not to knowingly proceed with both matters, or to obtain informed consent if possible from the affected clients.”

“Nelson Mullins Faces $2B Suits Over Alleged Conflicts” —

• “The former wives of two insurance mogul brothers have sued Nelson Mullins Riley & Scarborough LLP for $2 billion, claiming a partner there set up the couples’ estates while quietly conspiring with the brothers to shield marital assets from the wives in the event of divorce.”
• “In two nearly identical suits filed Wednesday in West Palm Beach, Florida, Michelle Waite and Sandra Cohen, who were married to Seth and Brad Cohen, respectively, said Nelson Mullins partner Jonathan Gopman jointly represented them with their husbands when he helped do their estate planning.”
• “But he then worked against the wives’ interests by taking steps with the Cohen brothers, who founded Insurance Care Direct, to cut the wives out of their shares of the marital assets without communicating with the women.”
• “Waite and Sandra Cohen estimate they were denied between $500 million and $1 billion each in what should have been their fair share of the marital assets in their divorces.”
• “Gopman placed marital assets outside the women’s reach, including through complex and unnecessary corporate restructurings and the establishment of foreign trusts, according to the suit. He also helped the brothers secret away marital assets over the course of several years, according to the suit.”
• “Gopman was at Akerman LLP in 2015 when he helped the couples set up their estates, according to the suit. He joined Nelson Mullins in July 2021.”
• “The ex-wives allege that the law firm knew Gopman had previously represented each couple jointly, but agreed to represent the brothers in their respective divorces despite the conflicts of interest.”
• “‘Because Nelson Mullins was involved as counsel in the divorce proceedings, as well as having its own counsel to defend Gopman and its interests in those same proceedings, Nelson Mullins was fully aware of the conflict of interests involved,’ the ex-wives said.”
• “Nelson Mullins also helped the brothers set up a new entity, Entratus LLC, which claimed ownership of the proprietary intellectual property developed over several years at ICD entities, according to the suit.”