This is the second post in our series on the “Ethics of Freelance Lawyering”. This post examines best practices to avoid conflicts of interest while freelancing or when hiring a freelance lawyer. (Our first post was on Confidentiality)
What should Freelance Lawyers do to Avoid Conflicts of Interest?
Avoiding conflicts of interest is an important duty for all lawyers, especially freelance lawyers who by nature are working for a number of lawyers or law firms with a number of end-clients.
Rule 3.4-1 of the Law Society of Ontario’s Rules of Professional Conduct outlines a lawyer’s “Duty to Avoid Conflicts of Interest”:
3.4-1 A lawyer shall not act or continue to act for a client where there is a conflict of interest, except as permitted under the rules in this Section.
Conflict of interest is defined under Rules 1.1-1:
“Conflict of Interest” means the existence of a substantial risk that a lawyer’s loyalty to or representation of a client would be materially and adversely affected by the lawyer’s own interest or the lawyer’s duties to another client, a former client, or a third person. The risk must be more than a mere possibility; there must be a genuine, serious risk to the duty of loyalty or to client representation arising from the retainer.
Each province has a similarly worded rule, as does the Federation of Law Societies of Canada’s Model Code of Professional Conduct.
All our freelance lawyers who take on legal work are called to the Bar in at least one province in Canada and licensed with the law society or regulator of that province. This means that they all must abide by any applicable Rules or Code of Professional Conduct.
To abide by the Rules, a freelance lawyer cannot work on projects for different firms where the end-clients could be deemed to be adverse in interest to each other. Likewise, a freelance lawyer cannot assist one firm in a matter substantially related to (or the same as) a previous matter formerly handled for a different firm where the former and current client have materially adverse interest to each other.
The Law Society of Ontario provides best practices when hiring a “Contract Lawyer (or Paralegal)” to act as a locum for lawyers who take extended leaves from their solo practice.[1] While this is a different situation than freelancing (locums or contract lawyers “step into the shoes” of the hiring lawyer and work directly for and represent the end-client; freelance lawyers work remotely, only under the supervision of the outsourcing lawyer, and with likely no end-client contact), the LSO provides the following indirect guidance:
The same rules apply to the Contract Lawyer or Paralegal and to the contracting firm/lawyer/paralegal. The Contract Lawyer or Paralegal must set up a system to check for conflicts prior to working on the contracting firm/lawyer/paralegal's files. A Contract Lawyer or Paralegal needs to keep a list of clients to whom he or she has provided legal services during all Contract Lawyer or Paralegal projects. The Contract Lawyer or Paralegal must ensure that no conflict exists between his or her present clients and those to whom the Contract Lawyer or Paralegal provided legal services during all past Contract Lawyer or Paralegal arrangements or in his or her separate practice, if one exists.[2]
Therefore, to avoid the potential for conflicts, freelance lawyers maintain a list of current and former lawyer/law firm clients and the name of the end-clients those firms are assisting. Before commencing any project, a freelance lawyer will complete a “conflicts check”, just like any other lawyer taking on work.
What can Outsourcing Lawyers do to Avoid Potential Conflicts When They Hire Freelance Lawyers?
In the United States, the American Bar Association has provided helpful assistance for best practices for outsourcing legal work to freelance lawyers, including information on avoiding conflicts of interest. According to “ABA Formal Opinion 88-356 – Temporary Lawyers”, the analysis of whether conflicts are imputed as between a freelance lawyer and a hiring firm turns on whether the freelance lawyer is deemed to be “associated” with the hiring firm. The most important factor to determine “association” is whether the freelance lawyer has access to information related to the representation of firm clients other than the client on whose matters the freelance lawyer is working.
Courts in Canada have also confirmed the presumption of imputed knowledge between partners and associates at the same firm[3] and where lawyers work in “association” but hold themselves out to the public as a law firm (without taking the required steps to inform the public that the lawyers have separate practices, take proactive steps to avoid conflicts, etc.).[4] Neither of these situations apply where the freelance lawyer is brought on only to work on one particular aspect of a file, under the supervision of the lawyer, works remotely, does not have access to the other files at the firm, does not appear on the firm’s website or letterhead, etc.
Best Practices
Best practices dictate that freelance lawyers should only have access to the file or files they are assisting with or only the documents necessary for completion of the agreed upon projects. The freelance lawyer should not have access to any other files belonging to the outsourcing law firm. By limiting access to only the documents needed for the task at hand, the freelance lawyer is denied access to files that could create an association or potential for conflicts. Fortunately, technology is available for file sharing or remote access to only specific files or documents.
Freelance lawyers should also have a freelance lawyer agreement in place outlining the specific duration of the project and scope of work and clarifying that the freelance lawyer is an independent contractor and not practicing in association with the firm.
What about Flex Legal? Does it check for conflicts?
Flex Legal is not a law firm and is not retained on any of the projects, nor is anyone who manages Flex. While Flex works closely with lawyers or law firms who hire our freelance lawyers to ensure quality control and satisfaction with the work produced, Flex does not have access to any of the confidential documents, information, or work products. This eliminates the potential for conflicts of interest to arise.
Hope this helps clarify any questions you may have about conflicts of interest and freelance lawyering. If not, please feel free to contact us!
[1] See “Tips for Hiring a Contract Lawyer”, Law Society of Ontario website: https://lso.ca/getdoc/ab5868f6-8b2b-424f-b4d0-42d7063b004b/tips-for-hiring-a-contract-lawyer-or-paralegal
[2] See https://lso.ca/getdoc/d528d5ae-10c1-4f2c-8650-5b32c8c91417/ethical-issues-and-practice-management
[3] MacDonald Estate v. Martin, [1990] 3 SCR at 1235.
[4] Jajj v 100337 Canada Ltd 2013 ONSC 5743, Performance Diversified Fund v Flation GP Group, 2016 ONSC 1133 (DIv Ct).
Note: This article provides an overview only for informational purposes and does not constitute legal advice.
Photo by Andrew Pons on Unsplash
What should Freelance Lawyers do to Avoid Conflicts of Interest?
Avoiding conflicts of interest is an important duty for all lawyers, especially freelance lawyers who by nature are working for a number of lawyers or law firms with a number of end-clients.
Rule 3.4-1 of the Law Society of Ontario’s Rules of Professional Conduct outlines a lawyer’s “Duty to Avoid Conflicts of Interest”:
3.4-1 A lawyer shall not act or continue to act for a client where there is a conflict of interest, except as permitted under the rules in this Section.
Conflict of interest is defined under Rules 1.1-1:
“Conflict of Interest” means the existence of a substantial risk that a lawyer’s loyalty to or representation of a client would be materially and adversely affected by the lawyer’s own interest or the lawyer’s duties to another client, a former client, or a third person. The risk must be more than a mere possibility; there must be a genuine, serious risk to the duty of loyalty or to client representation arising from the retainer.
Each province has a similarly worded rule, as does the Federation of Law Societies of Canada’s Model Code of Professional Conduct.
All our freelance lawyers who take on legal work are called to the Bar in at least one province in Canada and licensed with the law society or regulator of that province. This means that they all must abide by any applicable Rules or Code of Professional Conduct.
To abide by the Rules, a freelance lawyer cannot work on projects for different firms where the end-clients could be deemed to be adverse in interest to each other. Likewise, a freelance lawyer cannot assist one firm in a matter substantially related to (or the same as) a previous matter formerly handled for a different firm where the former and current client have materially adverse interest to each other.
The Law Society of Ontario provides best practices when hiring a “Contract Lawyer (or Paralegal)” to act as a locum for lawyers who take extended leaves from their solo practice.[1] While this is a different situation than freelancing (locums or contract lawyers “step into the shoes” of the hiring lawyer and work directly for and represent the end-client; freelance lawyers work remotely, only under the supervision of the outsourcing lawyer, and with likely no end-client contact), the LSO provides the following indirect guidance:
The same rules apply to the Contract Lawyer or Paralegal and to the contracting firm/lawyer/paralegal. The Contract Lawyer or Paralegal must set up a system to check for conflicts prior to working on the contracting firm/lawyer/paralegal's files. A Contract Lawyer or Paralegal needs to keep a list of clients to whom he or she has provided legal services during all Contract Lawyer or Paralegal projects. The Contract Lawyer or Paralegal must ensure that no conflict exists between his or her present clients and those to whom the Contract Lawyer or Paralegal provided legal services during all past Contract Lawyer or Paralegal arrangements or in his or her separate practice, if one exists.[2]
Therefore, to avoid the potential for conflicts, freelance lawyers maintain a list of current and former lawyer/law firm clients and the name of the end-clients those firms are assisting. Before commencing any project, a freelance lawyer will complete a “conflicts check”, just like any other lawyer taking on work.
What can Outsourcing Lawyers do to Avoid Potential Conflicts When They Hire Freelance Lawyers?
In the United States, the American Bar Association has provided helpful assistance for best practices for outsourcing legal work to freelance lawyers, including information on avoiding conflicts of interest. According to “ABA Formal Opinion 88-356 – Temporary Lawyers”, the analysis of whether conflicts are imputed as between a freelance lawyer and a hiring firm turns on whether the freelance lawyer is deemed to be “associated” with the hiring firm. The most important factor to determine “association” is whether the freelance lawyer has access to information related to the representation of firm clients other than the client on whose matters the freelance lawyer is working.
Courts in Canada have also confirmed the presumption of imputed knowledge between partners and associates at the same firm[3] and where lawyers work in “association” but hold themselves out to the public as a law firm (without taking the required steps to inform the public that the lawyers have separate practices, take proactive steps to avoid conflicts, etc.).[4] Neither of these situations apply where the freelance lawyer is brought on only to work on one particular aspect of a file, under the supervision of the lawyer, works remotely, does not have access to the other files at the firm, does not appear on the firm’s website or letterhead, etc.
Best Practices
Best practices dictate that freelance lawyers should only have access to the file or files they are assisting with or only the documents necessary for completion of the agreed upon projects. The freelance lawyer should not have access to any other files belonging to the outsourcing law firm. By limiting access to only the documents needed for the task at hand, the freelance lawyer is denied access to files that could create an association or potential for conflicts. Fortunately, technology is available for file sharing or remote access to only specific files or documents.
Freelance lawyers should also have a freelance lawyer agreement in place outlining the specific duration of the project and scope of work and clarifying that the freelance lawyer is an independent contractor and not practicing in association with the firm.
What about Flex Legal? Does it check for conflicts?
Flex Legal is not a law firm and is not retained on any of the projects, nor is anyone who manages Flex. While Flex works closely with lawyers or law firms who hire our freelance lawyers to ensure quality control and satisfaction with the work produced, Flex does not have access to any of the confidential documents, information, or work products. This eliminates the potential for conflicts of interest to arise.
Hope this helps clarify any questions you may have about conflicts of interest and freelance lawyering. If not, please feel free to contact us!
[1] See “Tips for Hiring a Contract Lawyer”, Law Society of Ontario website: https://lso.ca/getdoc/ab5868f6-8b2b-424f-b4d0-42d7063b004b/tips-for-hiring-a-contract-lawyer-or-paralegal
[2] See https://lso.ca/getdoc/d528d5ae-10c1-4f2c-8650-5b32c8c91417/ethical-issues-and-practice-management
[3] MacDonald Estate v. Martin, [1990] 3 SCR at 1235.
[4] Jajj v 100337 Canada Ltd 2013 ONSC 5743, Performance Diversified Fund v Flation GP Group, 2016 ONSC 1133 (DIv Ct).
Note: This article provides an overview only for informational purposes and does not constitute legal advice.
Photo by Andrew Pons on Unsplash
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