Can an Attorney Represent Multiple Parties with Conflicting Interests?

There are several issues to be aware of when it comes to attorneys hired to form or advise a business entity.  Multiple parties, confidential communications and prior relationships may all interfere with the formation of a business entity.

Attorneys hired to form or advise a business entity are often asked to represent individuals with conflicting interests.  Although the interests of associated individuals may differ with respect to capital investments, liquidity, control, allocations of profits and losses, and taxes, prospective clients commonly ask a single attorney to represent both the entity and multiple participants with divergent interests.  An attorney may not represent multiple parties with conflicting interests except with the informed written consent of each party.  An attorney representing more than one client should be alert for possible conflicts of interest throughout the entire period of representation.

Explicit ethical guidelines apply for an attorney representing an organization.    Theoretically, with multiple individuals or parties involved in the representation, a potential conflict will always exist.  It is prudent for business owners to remember that people commonly disagree as to the best avenue to pursue or language to use in an agreement without the disagreement jeopardizing the situation.