Representing clients in the entertainment industry can be a nightmare of conflicts of interest and potential malpractice liabilities arising from seemingly innocent and well intentioned actions. For example, suppose an existing client decides to invest in a recording artist’s career and asks you to represent them both in preparing the agreement between the artist and the investor, and then to represent the artist in dealings with a record company. Or you introduce one client to another client and they decide they want to do business with one another and have you represent both of them in the deal. The ability to network clients with one another is a significant asset for an attorney, but it can backfire. Unless you handle the actual and potential conflict of interest issues in accordance with the California Rules of Professional Conduct, you open yourself to the possibility of substantial future grief.
Conflicts arise in the entertainment industry not only from representing two clients simultaneously in the same transaction but also indirectly when you represent a client against another party whom you have previously represented or with whom you have a professional or financial relationship. Since the entertainment industry is relatively small, with few buyers, lots of sellers, and the usual cast of managers, agents, and accountants, the likelihood that a party on the other side of a transaction will be one with whom you have such a relationship is greater than in most businesses.
If you have made the proper disclosure and the client has given informed written consent to the representation (see Cal Rules of Prof Cond 3-310), the client may waive the conflict of interest. Nevertheless, any lawyer faced with a conflict situation should ask him- or herself, Will my professional judgment in counseling alternatives be interfered with, or will courses of action be foreclosed that should have reasonably been pursued on behalf of the client? If the answer is yes, even with disclosure and the client's consent, you should proceed with caution.
This article is necessarily general in nature and is not a substitute for legal advice with respect to any particular case. Readers should consult with an attorney before taking any action affecting their interests.
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The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
