Legal Question in Legal Ethics in New Jersey

Lawyer Conflict of Interest

I have been working in a start-up venture and have recently discovered that the Managing Member of the LLC has engaged in numerous acts of fraud. Additionally, the attorney who has handled the company's legal matters is a 30yr friend of the Managing Member. He (attorney) was granted equity in exchange for his services but then billed and was payed an additional 50K. Does a conflict of interest/ethical violation on the attorney's part exist based on a) his pre-existing relationship with the Managing Member b) his accepting equity compensation in the company he represents c) his billing and accepting cash on top of the equity (he received equity then valued at 180K plus 50K in cash for services that would typically cost +/-25K)


Asked on 3/25/09, 5:28 pm

1 Answer from Attorneys
Barry Kozyra Kozyra & Hartz, LLC

Re: Lawyer Conflict of Interest

These are very serious allegations and could lead to both liability and ethics problems for the attorney. What you describe is more than a simple conflict of interest (which is bad enough) and is potentially actionable depending on the facts on several levels.

You should consult with counsel right away to discuss your legal rights.

In addition to me, we have other attorneys on staff who would be able to assist if you care to give us a call. But do not wait as prejudice could occur by not acting quickly.

Disclaimer: Your question and any response given are not intended to create an attorney-client relationship. The response given is not intended to be relied upon by you or anyone else as it is based only on the limited information which you have provided. Other information is needed before advice can be given including facts which you have not supplied which may change the response to your question. You should consult with an attorney as soon as possible to assess your legal rights so as not to prejudice yourself.

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Answered on 3/25/09, 5:47 pm


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