What is a Conflict of Interest?
A conflict of interest is a situation that impedes your ability to offer undivided loyalty to your client. For example, you may represent, or have represented, a client of opposed interest, thereby making it impossible to represent the new client without sacrificing the undivided loyalty you owe to the existing or former client. Consider the following situations that would constitute a conflict:
You have helped set up a large number of asset structures for your client to minimize tax liabilities, and now you wish to represent his spouse in their divorce proceeding.
You defended a client in a criminal case related to an assault of person X, and then person X wishes to retain you to bring a civil suit in relation to that same assault. In this situation you would likely have learned confidential information while defending the first client, which would be prejudicial to that client were you to represent X in bringing suit against the first client.
A conflict may exist at the outset or can arise during the course of the relationship. You should also remain aware of the potential for conflicts to arise as well as actual conflicts that do arise. In other words, it is not adequate to turn your mind to conflict only at the inception of the lawyer-client relationship. The following are examples of conflicts that may arise during the course of a retainer:
You jointly represent business partners who subsequently have a falling out regarding the direction of their enterprise.
In a motor vehicle accident case you represent, as plaintiff’s counsel, the driver and the passenger of vehicle A. The driver of vehicle B denies liability and alleges negligence by the driver of vehicle A. Since a serious issue has been raised as to whether your client who was the driver of vehicle A was negligent, representation of your client who was a passenger in vehicle A would likely require suing your client who was the driver of vehicle A. You could not continue to act for both the driver and the passenger of vehicle A.
See paragraphs  and  of the commentary for rule 3.4-1 of the Code of Conduct for a list of factors you should consider to determine whether a conflict exists and for other examples of areas where conflicts of interest may occur.