SXSW CLE Wrap-up Part 3: Ethical pitfalls in entertainment law

Ethical dilemmas can arise in all areas of law, but the entertainment field can be fraught with them.

If they’re not careful, attorneys can run afoul of rules governing the attorney-client relationship, conflicts of interest, attorney compensation, and simultaneous representation, among others, speakers said Friday during a South by Southwest continuing legal education session.

That’s especially true if an attorney is wearing a second hat—agent, manager, even band member, said Austin entertainment and media lawyer Lawrence Waks, a partner with Jackson Walker LLP.

“I know a lot of folks in Austin, generally solos, that are both lawyers and agents, or lawyers and managers, or lawyers and musicians,” Waks said. “What hat are they wearing at any particular time? … It’s very difficult to discern that kind of thing.”

Speakers sounded notes of caution throughout the hourlong session, which focused on ethical issues in entertainment law. Along with Waks, the panel featured former Texas Supreme Court Chief Justice Wallace Jefferson and Austin trial lawyer Steve McConnico.

 

Conflicts of interest often happen when an attorney is asked to represent multiple parties associated with a single band or artist. In those cases, the attorney should warn the parties of the potential conflicts, encourage them to hire their own attorneys, and have them sign a conflict waiver, McConnico said.

However, certain conflicts can’t be waived under the rules of professional conduct, like if a manager is already in a dispute with band members, he said.

“That’s just something to be aware of,” McConnico said. “If you’re in a conflict situation, you’re not going to get a motion for summary judgment against you probably, but you’re going to get a verdict at the end of the day against you if it’s an obvious conflict.”

In Texas, like most states, a lawyer is prohibited from jointly representing clients when their interests are or may become adverse, said Jefferson, a partner in Alexander Dubose Jefferson Townsend. Disciplinary codes may differ from state to state, which can make joint representation a tricky area to navigate, he said.

“It’s sort of perilous when you enter into one of these agreements and you’re not sure exactly what law is going to apply, and you’re in a state that doesn’t have a very developed system of precedent in that area,” Jefferson said.

Attorneys in that predicament should consult the American Bar Association’s Model Rules of Professional Conduct, which form the basis of most state rules, along with state supreme court decisions and ethics opinions from bar associations in New York and California, the hotbeds of entertainment law, panelists said.

“You’ll be in a lot better shape before a judge or jury if you say, ‘I followed the ethics opinion,’” said McConnico, a partner in Scott, Douglass & McConnico LLP. “If you give me a case where somebody’s done that, I can defend them till the earth is flat and I’ll get that ethics opinion into evidence. But if they didn’t do anything to try to determine what the ethics opinions of the jurisdiction say about conflict, your defense attorneys will have a real disadvantage.”

To read materials related to this session and other South by Southwest CLE panels, visit the Lommen Abdo website.

Pictured, from left, are McConnico, Waks, and Jefferson. 

 

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