Conflict Check

An advisory firm receives a request to advise a buyer, and one partner recalls advising the seller last year, so before anyone accepts the work or receives detailed confidential documents the firm needs to find out whether those relationships prevent it from acting. Identify the proposed client by full legal name and useful aliases, and for a company check its relevant parent, subsidiaries and affiliates where the relationship matters.

Record the proposed service and subject of the matter, because the actual transaction, dispute or information the firm holds can make the difference. For contentious work, identify opposing parties and other important participants, and note that the American Bar Association's client-intake guidance says counsel, witnesses and third parties may need review when they become known.

Search the firm's current and former client records using consistent names and identifiers, including relevant prospective-client records where professional rules impose duties from an earlier consultation, because a database is useful only when people enter accurate information. Check personal interests too, since a professional who has a financial stake, board role or family connection may face an issue even if the firm has never represented the opposing party.

Do the check early, as the ABA's practice guidance says a law-firm conflict check should happen before legal advice and before signing an engagement letter, though other professions and jurisdictions differ. Treat a search hit as a question to investigate, not as a decision, so a qualified reviewer should examine the match and document why it is or is not material.

Protect confidentiality while checking, because the intake form needs enough detail to detect clashes but the firm should not circulate sensitive allegations or strategic documents widely. If there is a conflict, identify whose interests are affected and what duties apply, noting that the ABA model rule distinguishes direct adversity from materially limited representation but is not a worldwide rule.

Do not assume consent fixes every conflict, since where the governing rule permits a waiver it may require informed consent after a clear explanation, and sometimes written confirmation, while some direct conflicts cannot be cured even when both clients say yes. The firm's reviewer should assess the rule, client interests and practical separation, and decline the work if it cannot be accepted lawfully and fairly.

Accounting firms also assess conflicts within a broader client-acceptance process, and ICAEW's client-acceptance helpsheet lists prospective client details, services, identity and risk checks, audit appointments and the acceptance decision. Keep a decision trail of names searched, databases checked, potential matches, reviewer, conclusion and any consent or safeguards, so that if the work later changes the record helps the firm reassess rather than pretend the first check covered everything.

Repeat checks when new parties join, a transaction changes shape or another team takes on related work, because an opening-day search cannot catch a client who joins the firm next month, and define who is responsible for rerunning it. An illustrative process metric is matters checked before substantive work divided by all new matters opened, so if 98 of 100 were checked first the rate is 98%, which measures timing, not whether the conflict decisions were correct.

Train staff to flag a potential match without promising the client that it has been cleared, since a brief pause at intake is usually easier than untangling the work afterwards. For a business owner hiring advisers, expect a firm to ask about the parties and the type of work before agreeing, and expect it to explain any need to decline without revealing someone else's confidential information, because a conflict check protects clients only when the firm follows through on its findings.