Form 1-3

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 and Requesting Waiver of Potential Conflict for Multiple Representation of Title Company and Third Party

[Date]

[Name and address of prospective client]

Re:   [describe transaction]

[Salutation]

I am pleased that you are considering employing our firm in connection with the above-referenced transaction. Although it is not common for a lawyer to represent more than one party in a transaction, dual representation is permitted by professional ethics guidelines as long as two conditions are met.

First, the lawyer must conclude, after a good-faith self-evaluation, that the lawyer can adequately represent the interests of each client. The multiple representation should not adversely affect the attorney’s independent professional judgment on behalf of any client. Second, all clients must consent to the multiple representation after full disclosure is given by the lawyer.

The first condition has been satisfied because I believe that this firm can adequately represent each of you (although I hope you understand that we must reserve the right to with­draw from this dual representation if later events cause me in good faith to reach a different conclusion). This letter is intended to fulfill the second requirement mentioned above, that of disclosure and consent. Accordingly, I will review some of the possible effects that dual rep­resentation may have on you.

Conflicts of interest.      If I determine that, because of differences between the parties, I can no longer represent each of you impartially, I will inform you of the conflict, and I must then withdraw from representation. If this occurs, I will no longer be able to represent any party to the transaction. Should I determine that this law firm must withdraw from the repre­sentation, I will, if you wish, assist the parties in obtaining new counsel. You would, of course, be responsible for payment of all accrued legal fees and any outstanding expenses. Likewise, I 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.

Scope of employment.      I am being hired solely to advise you on and document this real estate transaction. I am not responsible for and will not advise you on other transactions, nor will I give either of you any kind of tax advice with respect to this transaction. [Include addi­tional disclaimers appropriate to the facts.]

Judgment calls.      In all real estate closings, a seller or buyer must decide which title matters materially affect title to the property. These decisions are often routine; however, on occasion they require my exercising professional judgment in representing your sometimes competing interests. [Describe examples of possible judgment calls appropriate to the facts.]

There are of course other potential problems that might develop. Although I assure you that I will try to act as fairly as possible in judgment-call matters, it is certainly possible that one of you may not concur with my judgment.

Confidential information.      During the course of any representation a lawyer generally becomes aware of confidential information regarding the client. The confidential information may be a potential cloud on the title that one party does not want revealed to the other party. Another possible confidential matter may be the financial capacity of a party, which bears on the likelihood of that party’s performance of its obligations.

Although I assure you that I will try to act discreetly within the bounds of fair dealing, it is certainly possible that either or both of you would prefer to eliminate any possibility of having your confidential information known by an attorney who is also representing the other party. Furthermore, neither of you will be protected by the attorney-client privilege concern­ing any information disclosed to me or another lawyer in this firm during our representation. The general rule is that, as between commonly represented clients, the privilege does not attach. Thus, confidential information that would be protected by the attorney-client privilege if we represented only one of you can be disclosed to the other party.

Of course, I would have declined the dual representation before now if I had not already concluded that I can adequately represent both of you in this transaction; however, I also understand that you may feel differently. Therefore, I would appreciate your giving careful thought to the matters discussed in this letter. If you consent to the multiple representation, please sign in the space below and return this letter to me. You should keep a copy of this let­ter for your records. I will be happy to answer any questions you might have.

Sincerely yours,

   
[Name of attorney]

I understand this disclosure and I consent to the proposed multiple representation.

   
[Name of prospective client]
Date: