Advance

Waivers
Relevant Facts:
Cedar Rapids Bank & Trust Co. v. Mako One Corp., 919 F.3d 529 (8th Cir. March 21, 2019)

• Firm provided legal services to Mortgagor for 1.5 years re “Badgerow

Building tax credit project.”
• Mortgagor acquired property.
• Firm drafted tax credit bond for Mortgagor.
• Thereafter, Mortgagee sought to retain Firm re “Badgerow Building tax
credit project.”
• Firm saw no conflict as to transaction, …
• BUT prepared conflict waiver to both parties.
Advance Waiver:
Cedar Rapids Bank & Trust Co. v. Mako One Corp., 919 F.3d 529 (8th Cir. March 21, 2019)
• “[T]he interests of CLIENT 1 [Mortgagee] & CLIENT 2 [Mortgagor] are or may be adverse” with regard to
the tax credit project [“Transaction”].

• CLIENT 1 & CLIENT 2 consent to current and future representation of CLIENT 1 and CLIENT 2 “on
matters unrelated to the Transaction” and to Firm’s “representation of CLIENT 1 in connection with the
Transaction.”

• Firm “will not use confidential client information to either client’s disadvantage” and “will be able to
fully and properly represent CLIENT 1 & CLIENT 2 on their separate matters without representation of
either client being affected by it’s representation of the other client.”

• “CLIENT 2 will not use the fact of our representation of CLIENT 1 as a basis to claim a conflict of interest
on the part of Firm or to seek disqualification of the Firm, in any matter in which Firm represent[s]
CLIENT 1 or may represent CLIENT 2, other than the Transaction …”

• CLIENT 1 agrees to Firm’s “representation of CLIENT 2 now or in the future in matters unrelated to the
Transaction,” and CLIENT 1 would “not use the fact of our representation of CLIENT 2 as a basis to claim
a conflict of interest on the part of Firm, or to seek disqualification of the Firm, in any matter in which
Firm represent[s] CLIENT 1 or may represent CLIENT 1, including the Transaction …”

• “In the event that contentious disputes or litigation arise regarding the Transaction or if the Firm
determines that continued representation may violate applicable rules of professional conduct, the
Firm will withdraw from representation of CLIENT 2 or CLIENT 1.”
Relevant Facts:
Cedar Rapids Bank & Trust Co. v. Mako One Corp., 919 F.3d 529 (8th Cir. March 21, 2019)

• Firm represented Mortgagee for remainder of transaction.

• Mortgagor retained different firm.
• Mortgagee purchased tax credit bond secured by mortgages.
• After transaction closed, parties negotiated & amended bond maturity date 6 times.
• Firm represented Mortgagee re all amendments.
• Mortgagor was represented by a third firm.
• Mortgagor failed to make any payments.
• Mortgagee, through Firm, sought to foreclose on property.
• After lawsuit filed, Mortgagor wrote to Firm stating it should withdraw.
• Firm said conflict letter signed by Mortgagor as former client allowed representation.
• Firm partner tried to testify against Mortgagor in the litigation.
Advance Waiver:
Southern Visions, LLP v. Red Diamond, Inc., 2019 WL 936666 (N.D. Ala. Feb. 26, 2019)

• CLIENT consents to the firm undertaking future

representations of other clients “in any matter that is not
substantially related” to the firm’s work for CLIENT, “even if
the interests of such clients in those matters are directly
adverse” to CLIENT, and “even if such representations would
be simultaneous.”

• The firm did not advise CLIENT to seek independent counsel

about the advance conflict waivers and CLIENT did not seek
independent counsel.
Relevant Facts:
Southern Visions, LLP v. Red Diamond, Inc., 2019 WL 936666 (N.D. Ala. Feb. 26, 2019)

• Law firm represented Alleged Infringer from 2009 – 2018.

• Scope of work defined as “legal counsel to provide general representation.”
• Firm represented Alleged Infringer with matters re employee benefits, tax, debt
collection & part-owner’s divorce.
• Firm received material confidential, non-public information.
• Patent Holder asked Firm to file infringement action against Alleged Infringer
while debt collection matters pending.
• Firm began representing Patent Holder knowing Alleged Infringer strongly
objected.
• 3 days after accepting rep. of Patent Holder, Firm withdrew from rep. of Alleged
Infringer in all matters.
 • Mueller Must Answer Questions About His Conflict of Interest (NLPC, July 23, 2019)
• Nixon Peabody Can Rep 'Varsity Blues' Parent & USC (Law360, July 23, 2019)
• Madoff Victims Cleared to Sue Legal ‘Savior’ for Conflicts (Bloomberg Law, July 19,
2019)
• Carlton Fields Switched Sides In Transaction, Suit Says (Law360, July 18, 2019)
• Cozen O'Connor DQ'd Over Client Conflict In Cannabis Deal (Law360, July 10, 2019)
• Boies Schiller Cleared to Represent Two ‘Varsity Blues’ Parents (Law360, July 7, 2019)
• Latham & Watkins Fighting to Stay on Aunt Becky’s Case Amid Conflicts Concerns
(Above the Law, July 2, 2019)

Conflict Waivers •
•
Pa. Attorney Can't Dodge $500K Malpractice Verdict (Law360, June 19, 2019)
Ropes & Gray Client OKs Rep Of Fellow 'Varsity Blues' Parent (Law360, June 17, 2019)

In The News • Advocates Seek To DQ Jones Day In Calif. Homelessness Suit (Law360, May 30, 2019)
• Pierce Bainbridge DQ'd From Manilow Films Copyright Suit (Law360, May 21, 2019)
• Judge Draws 'Wonder Years' Parallel In DQ Of Bradley Arant (Law360, February 26,
2019)
• S.D.N.Y. Bankruptcy Court Declines to Enforce Advance Conflict Waiver Against Winston
& Strawn Client, Netflix (JDSUPRA, September 6, 2018)
• Boies firing by NYT spotlights advance conflict waivers, common but controversial
(Reuters, November 9, 2017)
 • Advance waivers cannot be obtained
for the following:

• Incompetent Representation

Don’ts of • Representation Prohibited by Law

Advance • Representation involving the
Waivers assertion of a claim by one client
against another client represented
by the same lawyer in the same
proceeding before a tribunal.
 • Weigh the Risks
• Must be Waivable
• Narrow the Scope
• Clear & Unambiguous
• Disclose Known Facts
• Detail Reasonably Foreseeable Conflicts
Dos of Advance • Detail Potential Risks/Consequences
• Define Terms Used
Waivers • Use Examples
• Voluntary Screening?
• Sophistication/Experience of Client
• Review by Independent Counsel
• Clear Written Consent