NY proposes conflict rule relaxation

The Appellate Division in New York is considering
an amendment to the local professional conduct code, which could radically affect current conflict restrictions on US lawyers.

US lawyers working in their home jurisdictions are in no circumstances allowed to act adverse to their clients without first seeking a waiver. However, US lawyers working and licensed to practise abroad are absolved from any need to comply with US conflict rules when the ‘predominant effect’ of their work is outside the US, according to the New York Code of Professional Responsibility.

In a significant development, the four presiding justices of New York’s Appellate Division are discussing an amendment to the code that could widen the concept of ‘predominant effect’ to any work carried out by a New York-admitted lawyer, even if they are working in New York itself.

In a paper presented to the International Bar Association conference on risk management last week (17 September), Clifford Chance executive partner and general counsel Chris Perrin said this raised the prospect of a New York lawyer working in New York adverse to a US client of their firm without having to obtain a conflict waiver.

Perrin told The Lawyer: “It will enable US lawyers to compete with lawyers around the world who have less draconian conflict rules, so they wouldn’t have to get consent from clients to act on the other side from them
on transactions, as they do at the moment.”