Are Differences Among the Attorney Conflict of Interest Rules Consistent with Principles of Behavioral Economics

44 Pages Posted: 9 Mar 2006

See all articles by Leonard Gross

Leonard Gross

Southern Illinois University at Carbondale - School of Law

Abstract

This article examines whether the disparate treatment by the Model Rules of Professional Conduct ("Model Rules") of different types of conflicts of interest evidences unrealistic assumptions on the part of the framers of the Model Rules regarding lawyer and client behavior. The Model Rules and court decisions interpreting them treat different types of conflicts of interest differently. At one extreme, conflicts posed by a lawyer representing a client on a contingency fee basis do not even require disclosure. Moving in from this extreme, general conflicts of interest require disclosure and client consent confirmed in writing. In addition, the lawyer must reasonably believe that he can handle the case competently and diligently, the representation is not prohibited by law, and does not involve a claim by one client against another in the same litigation or other proceeding before a tribunal. Moving even further along the continuum, conflicts posed by a lawyer entering into business transactions with his client require that the terms be fair and reasonable and transmitted in writing, that the client be advised in writing to seek independent counsel, and that the client give informed written consent to the essential terms of the transaction, including the lawyer's role in the transaction. Some transactions are viewed as so problematic that they are absolutely forbidden, such as providing financial assistance to a client during pending or contemplated litigation, except for the advancement of court costs and expenses of litigation. Repayment of these costs and expenses may be contingent on the outcome of the matter or can be provided with no strings attached if the client is indigent. Likewise, prior to the conclusion of representation, a lawyer cannot negotiate an agreement giving the lawyer literary or media rights to an account based in substantial part on information relating to the representation. Finally, a lawyer cannot have sexual relations with a client unless a consensual relationship already existed between them when the client-lawyer relationship commenced.

Such disparate treatment stems in part from the Model Rules' drafters' perception that some conflicts are more likely to cause a lawyer to take advantage of a client than others, and some conflicts make it more difficult to obtain informed consent than others. Still other conflicts may be permissible for policy reasons having nothing to do with the dangers posed by the conflict. This article analyzes whether such disparate treatment is warranted and what it says about the Model Rules' framers' assumptions concerning human behavior. If such disparate treatment cannot be justified, then we must ask whether the framers' assumptions were mistaken, or whether the conflict of interest rules are the product of a conscious or subconscious attempt to serve the interests of attorneys at the expense of their clients.

This article explores principles of behavioral economics to determine whether the differences among the Model Rules governing conflicts of interest can be justified based on predictions about how lawyers and clients behave in such situations. Behavioral economics and social science literature would suggest that lawyers, like other humans, behave in a way to maximize their self-interest. However, some commentators have suggested that lawyers will behave in accordance with a higher "professional" mode. This article examines empirical evidence regarding how lawyers and clients behave in conflict of interest situations. This article analyzes whether the general model of behavioral economics applies to lawyers or whether lawyers will adhere to a "professional" model even when it is not in their best interest to do so.

Keywords: Conflict interest, behavioral economics, empirical, Model Rules

JEL Classification: D80, K39

Suggested Citation

Gross, Leonard, Are Differences Among the Attorney Conflict of Interest Rules Consistent with Principles of Behavioral Economics. Georgetown Journal of Legal Ethics, Vol. 19, p. 111, 2006. Available at SSRN: https://ssrn.com/abstract=887315

Leonard Gross (Contact Author)

Southern Illinois University at Carbondale - School of Law ( email )

1150 Douglas Drive
Carbondale, IL 62901-6804
United States
618-453-8770 (Phone)

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