ACC submitted an amicus curiae brief to the California Supreme Court asserting that a general, open-ended advance conflict waiver established by a law firm against its client was invalid.
WASHINGTON (December 6, 2016) –The Association of Corporate Counsel(ACC), a global legal association representing more than 40,000 in-house counsel employed by over 10,000 organizations in 85 countries, including more than 5,300 members in California, submitted an amicus curiae brief to the California Supreme Court on Friday asserting that a general, open-ended advance conflict waiver established by a law firm against its client was invalid.
ACC submitted its brief in the case, Sheppard, Mullin, Richter & Hampton LLP v. J-M Manufacturing Co., Inc., on behalf of the defendant, J-M Manufacturing Co., Inc., and urged the Court to uphold an earlier Court of Appeal ruling finding that the waiver is unenforceable. In January, the Court of Appeal ruled that without informed consent by its client, Sheppard Mullin cannot represent defendant J-M Manufacturing in a litigation matter while also representing one of the plaintiffs in other matters.
In its brief, ACC argues that the open-ended advance conflict waiver the law firm insisted upon was invalid, as it did not comply with state requirements for disclosure and informed consent set by California Rule of Professional Conduct 3-310. ACC goes on to argue that if upheld, similar waivers would thwart transparency in the attorney-client relationship, as law firms would no longer need to reveal conflicts of interest.
"In this particular case, we know that not only did Sheppard Mullin not disclose a particular conflict, but the firm concealed this fact from its client," said Amar Sarwal, vice president and chief legal strategist at the Association of Corporate Counsel. "The client was never given the opportunity to make an informed decision."
ACC also states that it does not oppose all advance conflict waivers, but believes that law firms must share "all known potential and actual conflicts of interest to their clients because attorneys' candor to clients should be the rule, not the exception." This information assists clients with their decision to hire outside counsel and is vital to the health of the attorney-client relationship, because the attorney's duty of loyalty to the client supersedes any advance conflict waiver.
"Openness, integrity, trust, and loyalty are the hallmarks of the attorney-client relationship," Sarwal said. "Attorneys need to be held to the highest ethical standards to protect clients and to promote public confidence in the legal system."
The ACC brief is available here. Eleven California general counsel (GCs) also submitted an amicus curiae to the Court, which may be read here.
About ACC: The Association of Corporate Counsel (ACC) is a global legal association that promotes the common professional and business interests of in-house counsel who work for corporations, associations and other private-sector organizations through information, education, networking, and advocacy. With more than 40,000 members employed by over 10,000 organizations in 85 countries, ACC connects its members to the people and resources necessary for both personal and professional growth. By in-house counsel, for in-house counsel.® For more information, visit www.acc.comand follow ACC on Twitter: @ACCinhouse.
# # #