A legal ethics specialist with the D.C. Bar, speaking at the Bar’s mandatory ethics course, opined that a lawyer’s student loan debt could create an irresolvable conflict of interest preventing him or her from taking on certain cases, at least while complying with the ethics rules
I never thought about that before, but horrors!…he’s right!
Rule 1.7 (b) (Conflicts of Interest) of D.C.’s Rules of Professional Conduct (as well as every other jurisdiction’s rules, except for California), reads…
A lawyer shall not represent a client with respect to a matter if:
(4) The lawyer’s professional judgment on behalf of the client will be or reasonably may be adversely affected by the lawyer’s responsibilities to or interests in a third party or the lawyer’s own financial, business, property, or personal interests.
The only way to get past this prohibition is for the lawyer to receive an informed waiver from the client, and for the lawyer to reasonably believe that the personal interest will not adversely affect his or her judgment on behalf of the client. If, however, a lawyer’s student loan debts are sufficiently crushing, I wonder if the latter conclusion is ever credible or reasonable. Wouldn’t such a lawyer desperately want a client in a contingent fee case to accept a generous settlement offer rather than risk getting nothing in trial? Could such a lawyer’s advice regarding whether to accept such an offer be trusted, ever?
The opinion was rendered during a discussion about how a lawyer’s impending bankruptcy or other extreme financial distress created an ethical requirement to disclose as a conflict of interest to a client or potential client, and how such problems could be so inherently biasing for the lawyer that making objective case-related decisions with financial implications for his own status would be impossible. After all, loan debts can’t be discharged with bankruptcy; they are among the worst kinds of debt. The ways such financial obligations could warp judgement in legal matters are many, including pushing a desperate lawyer to accept or pursue dubious long-shot litigation in hopes of a lucky jury verdict that could yield a big fee…all the better to pay that loan off with.
I have my doubts that a bar counsel would be eager to pursue discipline in such a case, but the fact remains that having a huge debt hanging over a lawyer’s head is not conducive to the objectivity and independence that the ethics rules require.