This letter is furnished only as a basic example and should not be used as a standard form. The attorney must be careful to tailor the details of the letter to the facts of the particular case. See section 1.5:2 in this chapter concerning representing multiple clients.
Letter Disclosing Potential Risks and Requesting Consent of Individual [Partners/Members] to Representation of [Partnership/Limited Liability Company]
[Date]
[Names and addresses of all partner[s] or member[s]]
Re: Proposed representation of [name of partnership or limited liability company] (the partnership/the company)
[Salutation]
In connection with your request that this law firm represent your [partnership/company], I want to make the following disclosures regarding potential ethical conflicts of interest involving our proposed representation.
Our representation of clients is governed by the Texas Disciplinary Rules of Professional Conduct. A lawyer has the duty to exercise independent professional judgment on behalf of each client. If a lawyer is requested to represent multiple clients in the same matter, two requirements must be met: The lawyer must be able to fulfill this duty for each client on an impartial basis, and the lawyer must obtain the consent of each client after explaining the possible risks involved in the multiple representation.
Concerning the representation of an entity, such as a corporation, limited liability company, partnership, joint venture, trust, or association, rule 1.12 of the Texas Disciplinary Rules of Professional Conduct provides, in part, as follows:
A lawyer employed or retained by an organization represents the entity. While the lawyer in the ordinary course of working relationships may report to, and accept direction from, an entity’s duly authorized constituents . . . the lawyer shall proceed as reasonably necessary in the best interest of the organization. . . .
Thus, as legal counsel to the entity, we will respond to the instructions of the purported representative authorized to act on behalf of the entity. For example, the managing partner or general partner of the partnership or the manager or managing member of the limited liability company that has the apparent authority and power to deal with this law firm. Further, this law firm has no responsibility to verify or investigate the representative’s authority and will not bear any responsibility for discovering whether the representative is not in fact authorized or has committed acts of fraud, defalcation, forgery, or other criminal or civil liability actions.
If matters arise that cause any one [partner/member] to have a claim against another [partner/member], this law firm could not represent either [partner/member]. If matters arise that cause any [partner/member] to have a claim against the [partnership/company] or that cause the [partnership/company] to have a claim against an individual [partner/member], this law firm retains the right to require the [partnership/company] to engage other legal counsel to represent it in that claim.
Before consenting to our representation of the [partnership/company], please be aware of the following:
1.This law firm has represented one or more of the [partners/members] in matters unrelated to the [partnership/company]. These [partners/members], for whom unrelated legal counsel has been furnished, include [name[s] of partner[s] or members[s]]. Each of these [partners/members] is requested to execute a form consenting to this law firm’s serving as counsel to the [partnership/company], because of potential conflicts of interest. At this time, we do not believe that our prior representation of individual [partners/members] will impair our independent professional judgment on behalf of the [partnership/company]. However, if we determine that, because of differences between the [partnership/company] and the [partners/members], we can no longer represent the [partnership/company] impartially or if a conflict arises during our representation of the [partnership/company], we will inform you of such conflict, and we must then withdraw from representation. If this occurs, we will no longer be able to represent any party to the conflict. Should we determine that this law firm must withdraw from the representation, we will, if you wish, assist the [partnership/company] in obtaining new counsel. The [partnership/company] would, of course, be responsible for payment of all accrued legal fees and any outstanding expenses. Likewise, we would return any unused portion of any advances that had been made. The need to obtain substitute counsel may involve additional legal fees and expenses.
2.Representation of any entity automatically involves potential conflicts, because entities are nothing more than the joining of individuals or other entities with differing needs for what is initially perceived to be a common objective. Each individual should understand that when there is such diversity of interests, the lawyer for the organization cannot provide legal representation for constituent individuals and that discussions between the lawyer for the organization and an individual may not be privileged insofar as that individual is concerned.
3.Before agreeing to the contents of this letter, you are advised to obtain separate legal counsel for these matters. If you consent to this law firm’s representation of the [partnership/company] as contemplated by this letter, please sign in the spaces below and return one copy of this letter to me.
Sincerely yours,
[Name of attorney]
We consent to your representation of the [partnership/company] under the terms and conditions outlined above.
[Name of partner or member]
Date:
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Repeat signature blocks as necessary. |