Before a law firm agrees to represent a new client, one of the first things it does is run a conflict check. This process — searching the firm’s existing client database against the names of the new client, its principals, its key counterparties, and its adverse parties — is not a marketing exercise or a formality. It is an ethical and legal requirement that governs whether the firm can represent you at all, and under what conditions.

For new business clients, the concept of conflicts of interest can seem abstract or technical. In practice, it has immediate practical implications: a firm that cannot resolve its conflicts cannot represent you, and discovering a conflict late in a transaction or dispute can force both you and the firm into a costly and disruptive transition to new counsel. Understanding how conflicts work — and what to do when one arises — helps you navigate these situations with confidence.

What a Conflict of Interest Is

At its core, a conflict of interest in legal representation exists when a lawyer’s duties to one client are or could be adverse to the interests of another client, a former client, or the lawyer themselves. The American Bar Association’s Model Rules of Professional Conduct, adopted in some form in virtually every state, define the contours of these obligations in considerable detail, but the underlying principle is simple: your lawyer’s loyalty must be uncompromised. When something could compromise that loyalty — or could reasonably appear to do so — a conflict exists.

Conflicts come in several forms. A direct conflict arises when a law firm is asked to represent two clients on opposite sides of the same transaction or dispute. A firm cannot simultaneously represent both parties to a contract negotiation or both sides in a lawsuit — the interests are inherently adverse, and providing loyal representation to both is impossible. This type of conflict is always disqualifying and cannot be waived.

A more common situation is a positional conflict or a conflict between a current client and a prospective new client where the interests, while not directly adverse on the same matter, are materially adverse in ways that could affect the firm’s ability to provide independent advice. For example, a firm that represents a major player in your industry on ongoing matters may face a conflict if it is asked to advise you on a transaction that could be adverse to that client’s interests — even if the two matters do not directly overlap.

Conflicts can also arise with former clients. Once a law firm has represented a client, it generally cannot later represent an adverse party on a matter that is substantially related to the prior representation, because doing so could involve using confidential information learned from the former client. The former client relationship creates obligations that persist after the engagement ends.

Why Law Firms Run Conflict Checks

Conflict checks are required because representing a client when a disqualifying conflict exists can expose the attorney to disciplinary proceedings, disqualification from the case, malpractice liability, and fee forfeiture. The purpose of conflict rules is not to create bureaucratic obstacles — it is to protect clients from the very real harm that can result when an attorney’s loyalty is divided or when confidential information from one representation bleeds into another.

In practice, conflict checks work by searching the firm’s conflict database — a record of all parties the firm has represented or interacted with in a legal capacity — against the names of the parties involved in the new prospective engagement. This is why, when you first approach a law firm about representing you, you will be asked for the names of the parties involved in your matter: you as the client, any entities affiliated with you, and any adverse or potentially adverse parties. The firm cannot do a meaningful conflict check without this information.

At large firms that represent hundreds or thousands of clients, conflict checks are complex undertakings. A firm that represents a major corporation might have tens of thousands of entries in its conflict database, across many subsidiaries, affiliates, and related parties. Even a small matter involving a relatively obscure company can implicate a conflict if one of that company’s principals happens to be a party in another matter the firm is handling.

What Happens When a Conflict Is Found

When a conflict check reveals a potential issue, the firm must analyze whether it is a disqualifying conflict, a waivable conflict, or something that can be managed through appropriate safeguards like an ethical screen. This analysis is not always straightforward, and the same set of facts can be evaluated differently by different lawyers applying the same rules.

If the conflict is disqualifying — for example, because the firm is being asked to represent adverse parties on the same matter — the firm must decline the representation. There is no mechanism for client consent to cure a conflict of this nature. The firm may be able to assist with transferring your matter to appropriate new counsel, but it cannot proceed.

If the conflict is potentially waivable — which covers a broad range of situations involving concurrent representations of clients whose interests are adverse in some ways but not on the specific matter at hand — the firm may be able to proceed with the informed consent of all affected clients. This is where conflict waivers come in.

What a Conflict Waiver Means and When to Sign One

A conflict waiver is a written disclosure and consent by which a client acknowledges the existence of a conflict, understands its implications, and consents to the attorney proceeding with the representation notwithstanding the conflict. For a waiver to be effective under the applicable professional conduct rules, it must be informed — the client must actually understand what they are consenting to, not merely acknowledge that a conflict exists.

This means that before you sign a conflict waiver, you should understand specifically: what the conflict is, meaning who the other client is and how their interests might be adverse to yours; whether the firm has erected or intends to erect information barriers between the teams handling each representation; what happens to your confidential information given the conflict; and what your options are if you do not sign, including finding other counsel.

The decision about whether to sign a conflict waiver depends heavily on the specific circumstances. Some waivers are genuinely low-risk: for example, a firm that represents you for entity formation and represents an unrelated company in an employment matter faces a conflict on paper (two current clients) but no meaningful practical risk that the representations will interfere with each other. Signing a waiver in that context is reasonable.

Other waivers deserve more careful consideration. If the conflict involves another client whose business interests are substantively adverse to yours, whose principals you have had contentious dealings with, or who is in the same industry and market as your company, the risk that the conflict could affect the quality of your representation is more real. In those situations, you should consider whether the value of using this particular firm outweighs the risk of diluted loyalty, or whether the better course is to find counsel without the conflict.

You are never required to sign a conflict waiver. If you are uncomfortable with a disclosed conflict and decide not to waive it, the firm must decline the representation. That is not a penalty — it is the system working correctly. You can then seek representation from a firm without the conflict.

Advance Conflict Waivers

Some law firms, particularly large firms with extensive client rosters, include advance conflict waivers in their engagement letters. An advance waiver is a broad consent given at the outset of the representation that purports to waive the client’s right to object to certain categories of future conflicts that might arise during the engagement — conflicts that cannot be specifically identified at the time of signing because the representation has not yet begun.

Advance waivers are controversial and their enforceability depends on how broadly they are drawn and on the law of the relevant jurisdiction. A very broad advance waiver — one that purports to allow the firm to represent any other client with adverse interests on any future matter — is much more likely to be found unenforceable or insufficient than a narrowly tailored advance waiver that discloses specific categories of clients the firm regularly represents and seeks consent to continue representing them in matters unrelated to your engagement.

If your engagement letter includes an advance conflict waiver, read it carefully. Ask the firm to explain what categories of future conflicts they are anticipating, and why. Consider whether the scope of the waiver is reasonable given what you know about the firm’s other clients and practices. You are not obligated to accept the waiver language as presented.

What to Do If a Conflict Develops Mid-Matter

Conflicts can develop during an ongoing representation, not only at the outset. A firm that begins representing you on a contract matter may later be approached by another company that turns out to be adverse to your interests. A firm’s existing client may expand their business into your market in a way that creates adversity. Events during the representation may transform what looked like a non-conflicted situation into a conflicted one.

When a conflict develops mid-matter, the firm’s obligations depend on the nature of the conflict. If the conflict is waivable, the firm must disclose it and seek consent before continuing. If it is not waivable, the firm must withdraw from one or both representations, subject to applicable rules about protecting each client’s interests during the transition.

A mid-matter withdrawal is disruptive and expensive. You may have to transfer significant files, rebuild institutional context with new counsel, and potentially absorb delays in your matter while new counsel gets up to speed. This is one of the reasons why asking about a firm’s other clients and potential conflict areas before you engage — rather than after — is a worthwhile investment of time.

If you discover that your attorney has developed a conflict they have not disclosed to you, or if you believe your attorney is not providing fully loyal representation because of an undisclosed conflict, you should address it directly. You are entitled to raise the concern, to ask for a written explanation of the firm’s analysis, and to seek independent advice about your options. In egregious cases, an attorney’s failure to disclose or properly manage a conflict may be the basis for a complaint to the state bar or a malpractice claim.

Ethical Screens and Information Barriers

In some conflict situations, particularly those involving former client conflicts at large firms, the conflict can be managed through an ethical screen — sometimes called a Chinese wall or information barrier. An ethical screen is a set of firm policies and procedures designed to prevent attorneys who worked on one matter from having access to confidential information related to a separate matter involving adverse parties.

Ethical screens are most commonly used when a lateral attorney joins a firm and brings a conflict with them from their prior firm. The Rules of Professional Conduct in many states permit this kind of conflict to be managed through a properly implemented screen, under which the conflicted attorney is walled off from the new matter and from the attorneys working on it.

Screens are only effective if implemented promptly and rigorously. If you are told that a conflict will be managed through an ethical screen, you are entitled to ask specifically what procedures the firm uses to implement and monitor the screen, and how you will be notified if the screen is breached. The existence of a screen is not a guarantee that no confidential information will cross — it is a procedural safeguard that reduces the risk. Whether the risk reduction is sufficient depends on the nature of the conflict and the specific circumstances.