7 - Conflicts of Loyalty and Interest

Summary

We should act for only one client at a time, to avoid a conflict of interest (or a conflict of loyalty). So what happens when your law firm as a whole has two commercial clients trying to negotiate a merger and one lawyer in one team ‒ yourself ‒ suddenly learns something damaging about the other client that could derail the merger? Traditional role morality, virtue ethics and Confucian teaching require us to avoid situations where interests conflict. Loyalty is not contentious for most of us, except when we are setting our fees. However, the professional conduct rules that apply to current (concurrent) client conflicts and current–former (successive) client conflicts are some of the most complex in Greater China. Utilising scenarios around Big Pharma patents’ disputes, competing airlines and competing steelmakers, our diagrams set out the conduct rules of Greater China and suggest solutions according to general morality. Avoid joint representation in commercially competitive areas – regardless of an information barrier – and where a conflict emerges due to a firm merger, cease acting for both parties.