Wisconsin Lawyer: What Keeps you Awake at Night?: Should I Represent Multiple Family Members in a Common Transaction?:

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    What Keeps you Awake at Night?: Should I Represent Multiple Family Members in a Common Transaction?

    I worry about handling transactions between a client’s family members. On the one hand, each should have his or her own attorney, but on the other hand, in most such transactions separate representation will simply cost the family more. This is especially troubling when I have represented members of a family for many years. How can I serve the family as a unit, and still protect myself and remain ethical?
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    Wisconsin Lawyer Wisconsin Lawyer

    Vol. 80, No. 11, November 2007

    Every Member Should Sign a Conflict of Interest Waiver

    Walter NetaAlways recommend separate attorneys for each family member. If they want to save costs and will not have separate attorneys, have each family member sign a conflict of interest waiver for each separate matter. If a family member refuses to sign, then inform the person that you will not represent his or her interests in this matter and recommend that the person retain his or her own lawyer. If there are any documents to be signed by all family members, have a disclaimer stating that all parties: were given an opportunity to consult with a lawyer; enter into the matter of their own free will and volition; and hold you harmless.

    - Walter N. Neta, Olson, Kulkoski, Galloway & Vesely S.C., Green Bay

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    Patrick SylvesterInclude in Your Written Fee Agreement How You Will Handle Any Conflicts

    As a trusts and estates attorney, I regularly represent clients who are related to each other, each of whom has an interest in the legal matter at issue. The most common situation is providing estate planning services for husbands and wives. I tell clients that sometimes conflicts arise. I explain what professional steps I need to take if such conflict does arise. I am extra careful to address the issue of possible conflicts when either spouse has children from a prior marriage. In my estate planning fee agreement, I use language provided by the American College of Trust and Estate Counsel (ACTEC):

    Consents to Family Representation

    It is common for a husband and wife to employ the same lawyer to assist them in planning their estates. You have taken this approach by asking me to represent both of you in your planning. It is important that you understand that because I will be representing both of you, you are considered my client, collectively. Accordingly, matters that one of you might discuss with me may be disclosed to the other of you. Ethical considerations prohibit me from agreeing with either of you to withhold information from the other. In this representation, I will not give legal advice to either of you or make any changes in any of your estate planning documents without your mutual knowledge and consent. Of course, anything either of you discusses with me is privileged from disclosure to third parties.

    If a conflict of interest arises between you during the course of your planning or if the two of you have a difference of opinion, I can point out the pros and cons of your respective positions or differing opinions. However, ethical considerations prohibit me, as the lawyer of both of you, from advocating one of your positions over the other. Furthermore, I would not be able to advocate one of your positions versus the other if there is a dispute at any time as to your respective property rights or interests or as to other legal issues between you. If actual conflicts of interest do arise between you of such a nature that in my judgment it is impossible for me to perform my ethical obligations to both of you, it would become necessary for me to withdraw as your joint lawyer.

    - Patrick S. Sylvester, Sylvester Law Firm P.C., Wilmette, Ill.

    For Overlapping Transactions, Meet with the Parties and Their Counsel

    In a situation in which multiple family members are involved, and only one attorney's advice is sought, that attorney is always in jeopardy. I have successfully dealt with this issue with the use of one-time meetings with other counsel to obtain written consents to the representation by all the parties involved. For example, sometimes it is necessary in the context of an overlapping bankruptcy and divorce action for one attorney to represent the parties in a joint bankruptcy, while they are divorcing each other. Their interest in the bankruptcy action is the same, while all their other interests usually are opposed. How to address this?

    If both parties and their own counsel meet with me, together we can usually determine how the parties' interests play out, and the waiver of any conflict that I obtain as a result of that meeting will withstand scrutiny. I realize that this procedure may be more costly than having just one attorney do it all, but it is less costly than having multiple attorneys for the entire transaction, and affords the parties clear advice as to their own interests and any potential issues. It also affords the attorney representing multiple family members excellent protection from future claims by these same family members.

     

    Keep the Dialog Going …

    Add to this discussion. Email your response for possible inclusion in a future issue to org wislawyer wisbar wisbar wislawyer org, subject line: Multiple Family. Limit your response to 200 words. Responses may be edited for style and clarity.

    To suggest a question: The WL welcomes suggestions for questions to pose to readers. Email your suggestions to org wislawyer wisbar wisbar wislawyer org, subject line: Proposed WL Question.

    - Laura T. Storzer, A Storzer Law Office S.C., Fond du Lac

    Discuss Early On Why Separate Representation May Be Needed

    William 
ThedingaA common perception among clients is that lawyers may be necessary for a business transaction but that they often add cost and complication to the transaction. So telling a client that another lawyer or lawyers may be required because of possibly conflicting interests is unpleasant for the client, who has visions of more cost and complication, and unpleasant for the attorney, who must either decline representation entirely or limit representation. It's easy to tell a client that the person who has sued them is adverse, but it's much harder to explain to a family member that you can't represent them because their interests are adverse to another family member. After all, the lawyer's prior relationship and prior representation was most likely a relationship and representation for the family. But, even though the discussion is hard _ for lawyer and client _ it's a discussion that must come early and be done clearly. In most situations when family members or other "friendly" partners in a business transaction may have potentially conflicting interests, those interests must be identified early and individual family members advised about separate representation.

    - William H. Thedinga, Weld, Riley, Prenn & Ricci S.C., Eau Claire

     




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