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Representing Closely Held Entities: Conflicts of Interest and Fiduciary Duties to a Company and its Principals

Documenting Corporate Authority, Avoiding Pitfalls When a Dispute Arises, Implied Attorney-Client Relationships, ABA Model Rules

A live 90-minute CLE video webinar with interactive Q&A

This program is included with the Strafford CLE Pass. Click for more information.
This program is included with the Strafford All-Access Pass. Click for more information.

Thursday, February 20, 2025

1:00pm-2:30pm EST, 10:00am-11:30am PST

or call 1-800-926-7926
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This CLE will examine practical, legal, and ethical issues confronting counsel representing a closely held entity, including potential conflicts of interest and fiduciary duties owed to the company and its shareholders, members, officers, or directors. The panel will also discuss best practices for handling disputes between principals and guidance provided in the ABA Model Rules of Professional Conduct (the ABA Rules).

Description

When counsel represents a closely held entity (a corporation, LLC, or partnership in which there are a small number of owners and a substantial overlap between ownership and management), it can be difficult to discern whether conflicts of interest exist or where a fiduciary duty is owed.

While corporate counsel's first duty is to the company, the principals—who retained counsel—sometimes view that attorney as their own. Counsel must clearly understand who is authorized to take action (instruct counsel) and confirm that necessary board actions and other corporate formalities are followed.

Even after counsel has delineated the scope of representation, intracompany disputes may change the dynamic. Practitioners must be careful to identify their actual client(s) under an attorney-client relationship, disclose any conflicts of interest to those parties, and obtain a conflict waiver if appropriate. Adopted in some form in most states, the ABA Model Rules of Professional Conduct (the ABA Rules) are instructive in that regard.

Listen as our panelist discusses the potential pitfalls of representing a closely held entity, including corporate governance and conflict concerns when representing a company and its principals. The panelist will also examine the ABA Rules and how they might apply in certain fact scenarios.

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Outline

  1. Identifying the client: corporation/company vs. members, shareholders, officers, directors
  2. Engagement letters: importance of disclosure and acknowledgment of representation
  3. Who holds, is within, and controls an entity's attorney-client privilege
  4. Documenting "duly authorized" officers
  5. Observing corporate formalities
  6. ABA Model Rules of Professional Conduct
  7. Special circumstances creating a duty to non-client constituents
  8. Best practices when disputes arise between constituents

Benefits

The panelist will review these and other key issues:

  • When can counsel represent a corporate entity and its constituent shareholders, members, officers, or directors?
  • How should counsel respond to actions or instructions from an officer of the entity when counsel does not think the action is in the company's best interest?
  • When is an attorney-client relationship established under the ABA Rules?
  • What steps should counsel take when a dispute arises between shareholders, officers, or directors of a company?

Faculty

Bagger, Paula
Paula M. Bagger
Attorney
Law Office of Paula M. Bagger

Ms. Bagger is an attorney, arbitrator, and mediator with significant experience addressing a broad range of commercial...  |  Read More

Attend on February 20

Cannot Attend February 20?

You may pre-order a recording to listen at your convenience. Recordings are available 48 hours after the webinar. Strafford will process CLE credit for one person on each recording. All formats include course handouts.

To find out which recorded format will provide the best CLE option, select your state:

CLE On-Demand Video