Doing Business with Your Clients
Whenever a client is in a business venture with an attorney, there is potential for confusion of roles. If the attorney acts only as a businessperson, there is no conflict of interest. However, if the attorney also provides legal services or makes legal decisions, there is a conflict with the other participants in the venture. It is not unusual for attorneys to be partners or shareholders in business ventures in which the attorney also provides legal advice. The attorney may be an investor as well as counsel, or he or she may provide legal services as his or her contribution to the venture.
As long as the interests of all of the participants are the same, this conflict will not be a problem. But in most ventures, the interests of the participants are not the same. It is best if the legal work for the business is done by an attorney who has no financial or other interest in the business. If this is impractical, the nonattorney participants should have an uninvolved separate attorney review the basic business documents. They should also consult with their personal attorney whenever there are changes in the business organization.