Conflict of interest? What conflict of interest?

Note:  This post was inspired in part by a Billboard Biz article written by Steve Knopper entitled "Why Music Executives Seek Lawyers With Conflicts of Interest: 'It's a Very Incestuous Business'" and published October 19, 2018.  Any reference to the "article" or "the Billboard article is to this article.

You're a developing recording artist and ready to roll with your first major label record deal. You simply smile and nod when told who your attorney for the deal will be. But something trips in your mind when you learn that this attorney will simultaneously represent the label.

You need a divorce and have children with your spouse. Or your relationship with the other parent of your children is on the skids, and a court-ordered parenting plan will become necessary soon. You seen no harm in saving money and hassle and just hiring one lawyer. But when you sit down to meet with the lawyer, he or she slides over a sheet of paper captioned "Conflict of Interest Waiver" at the top and two signature lines at the bottom and explains that he or she will only be representing the other party unless both of you sign.

No one wants to spend money unnecessarily, and no one wants to kill a great entertainment business deal. And why ruin a harmonious breakup with legal representation?

There are no easy answers here. And lawyer ethical rules vary from state to state. In Tennessee, our rules are that concurrent conflicts of interest are forbidden and that, in the instance of a former client, a lawyer may not take on a matter where a potential client's interests are materially adverse to the interests of a former client. A lawyer is also bound to protect confidential information of a former client.

In most instances, however, even concurrent conflicts (ones where representation is directly adverse or where there is significant risk that representation will be materially limited by a duty to a former client or third person) may be waived by informed consent in writing by both parties.

One question that sometimes arises is when does a "current client" become a "former client". Folks who retain a certain lawyer like to continue to think that the lawyer remains their lawyer even though they don't keep the lawyer on retainer and even though no actual work has been done for the client for years. This is especially true in the Nashville music business, which is a small circle where long-term professional relationships are valued and where "professional" blends into "personal".

I've been criticized in my career for accepting divorce representation in a setting where I knew both parties and even attended church with both parties, though I didn't know the opposing party all that well. But I've never been criticized for representing both parties in a divorce: Because it never has happened.

Sometimes only one party retains counsel in a divorce. And many times it works out fine. The final analysis depends on factors such as whether parenting time is at stake and if the parties own real property together. As long as the lawyer doesn't deceive the unrepresented party, it is all good. Courtesy is extended to everyone. Legal advice is extended only to one party.

The Billboard article cites instances of conflicted legal representation where things did not end up so great for high-profile acts, i.e. Billy Joel and Lil' Kim. It also discusses situations where relationships sink and where a lawyer may be caught in the middle and compelled by ethical rules not to disclose facts that are detrimental to one side.

The final word from here (for now) is that you must walk the line (pun intended) between good relationships and common sense and protection. Having an attorney on your side in a music industry deal who has a background representing the label or manager on the other side may be a good thing. But having the same attorney for both sides in the same deal never is a good thing. Same analysis for a divorce. You are better off on your own than having an attorney who claims to be on both sides at once.


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