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That's My Lawyer

Is it OK to share a lawyer with a close competitor?
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This story appears in the August 2006 issue of Entrepreneur. Subscribe »
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You expect your lawyer to represent you zealously, protect your confidentiality and loyally defend you. So what if your lawyer also represents a close competitor?

That's not necessarily a bad thing--unless you're suing that competitor, or vice versa. It's often a plus to hire a lawyer who specializes in an industry and understands its issues. But if you want your lawyer to double as a business advisor or serve on your board of directors, keep in mind you'll have to expose trade secrets--your business plans, strengths and weaknesses.

State bar associations require lawyers to abide by a code of conduct that addresses conflicts of interest and prohibits them from revealing confidential information to others. Ask yourself: Does my lawyer know things that I want to keep confidential, which the lawyer would otherwise disclose for the benefit of another client?

When do the drawbacks of having a lawyer who represents your competitor outweigh the benefits of having a lawyer who understands your industry? When both companies are bidding for the same contract, or when the rivalry lands in a courtroom. But the crux is this: The lawyer is required to review every client relationship and each business dealing regularly and tell you if there might be a conflict of interest, so you can judge for yourself whether to continue.

Jane Easter Bahls is a writer in Rock Island, Illinois, specializing in business and legal topics.
Edition: May 2017

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