Multistate Professional Responsibility Examination (MPRE)Conflicts of InterestMedium
Attorney Smith represents Client Alpha in a complex intellectual property dispute against Company Beta. During the litigation, Client Alpha expresses interest in acquiring a division of Company Beta. Attorney Smith, without seeking Client Alpha's informed consent, begins researching the financial health and acquisition history of Company Beta to advise Client Alpha on the potential acquisition. Is Attorney Smith's conduct permissible under the Model Rules of Professional Conduct?
- AYes, provided Attorney Smith does not disclose any confidential information gained from the litigation to Client Alpha concerning the acquisition.
- BYes, because the acquisition research is related to understanding the opposing party's overall business, which could impact the ongoing litigation strategy.
- CNo, because an attorney should never advise a client on acquiring an opposing party, regardless of consent.
- DNo, because representing a client in an acquisition of an opposing party creates a concurrent conflict of interest requiring informed consent.
Show answer & explanationAnswer & explanation
Correct answer: D. No, because representing a client in an acquisition of an opposing party creates a concurrent conflict of interest requiring informed consent.
Attorney Smith's actions create a concurrent conflict of interest because the representation of Client Alpha in the litigation against Company Beta is directly adverse to representing Client Alpha in an acquisition of Company Beta. This requires informed consent, confirmed in writing, from Client Alpha.
Why the other options are wrong
- A. Confidentiality is a separate duty; the core issue here is the conflict of interest arising from directly adverse positions.
- B. While understanding an opposing party's business can be relevant, actively advising on an acquisition of that party during litigation creates a direct adversity.
- C. Advising on such an acquisition can be permissible, but only with proper informed consent from the client.
Concurrent Conflict of Interest (Direct Adversity)
A concurrent conflict of interest exists if the representation of one client will be directly adverse to another client.
- Requires informed consent, confirmed in writing.
- Conflict must be consentable.
- Direct adversity can arise in litigation or transactional contexts.
Memory trick: Two clients, one lawyer, potential for a legal squabble.