When Clients Clash: Abrano, Hot Potato and the Duty of Loyalty
Attorneys who advise closely-held corporations face recurring ethical challenges when conflicts develop among owners and managers of the business. The Supreme Judicial Court recently issued a unanimous decision, Bryan Corp. v. Abrano, 474 Mass. 504 (June 14, 2016), that provides much needed guidance to attorneys practicing in this area and that has broader implications for attorney-client relationships generally.
The decision addresses, among other important ethical concerns, how to assess conflicts of interest and obtain informed consent, how to properly terminate a client relationship, to whom in a close corporation do attorneys owe a duty of loyalty and under what circumstances, if any, are attorneys permitted to drop one client like a "hot potato" for another, presumably more lucrative, opportunity.