The Sophisticates: Conflicted Representation and the Lehman Bankruptcy

43 Pages Posted: 8 May 2012 Last revised: 26 Oct 2012

See all articles by Milan Markovic

Milan Markovic

Texas A&M University School of Law

Date Written: April 14, 2012


Scholars have long suggested that attorney conflict of interest rules are too onerous and that sophisticated clients may not need the protection of such rules.

This article utilizes the law firm of Sullivan & Cromwell’s representation of Lehman Brothers during the financial crisis as a case study to contend that attorney conflicts of interest can undermine the representation of even extremely sophisticated corporate clients. This is because the significance of a particular conflict can change during the course of a representation and the fact that a sophisticated client may have previously consented to a conflict does not ensure that the conflict will not jeopardize the representation. Attorneys are also likely to overestimate their capacities to account for conflicts of interest.

Attorney conflict of interest rules should be modified so as to prohibit conflicted representation when the attorney’s ability to satisfy the client’s objectives of the representation is frustrated by a conflict of interest and to expressly require regular consultation between the attorney and client concerning the conflict. Of equal importance is that attorneys do not conceive of their conflicts of interest as mere obstacles to be circumvented.

Keywords: Conflicts of Interest, Financial Crisis, Legal Ethics, Lehman Brothers

Suggested Citation

Markovic, Milan, The Sophisticates: Conflicted Representation and the Lehman Bankruptcy (April 14, 2012). Utah Law Review, 2012; Temple University Legal Studies Research Paper No. 2012-26. Available at SSRN:

Milan Markovic (Contact Author)

Texas A&M University School of Law ( email )

1515 Commerce Street
Fort Worth, TX 76102
United States
817-212-4056 (Phone)

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