Before the Coffee Cools: A Conflict Screen for First Enquiries
Most conflict problems are not born in the engagement letter. They are born in the first ten minutes of enthusiasm, when a prospective client describes a matter, the firm sees an attractive fee, and nobody asks who else is involved. By the time the retainer is drafted, the firm may already be committed to a position it cannot easily unwind.
A conflict screen at enquiry stage is therefore not bureaucracy. It is a commercial and regulatory control. It protects the firm from having to resign, from damaging a long-standing client relationship, and from the awkward conversation that follows when two files turn out to be closer than anyone realised.
The enquiry call is a control point
A conflict check should begin before the first substantive meeting, not after it. The person taking the enquiry — whether a partner, a practice manager or a business development colleague — should be able to capture enough information to run a meaningful search without turning the call into an interrogation.
The aim is not to obtain a full matter profile. It is to identify the parties, the nature of the work, and any obvious adjacency to existing clients or matters. A short, structured enquiry note is usually enough. The discipline lies in completing it every time, including for prospects who seem unlikely to instruct.
What to ask before the meeting is booked
At minimum, the firm should record:
- the full legal names of the prospective client and any parent, subsidiary or group entity likely to be involved;
- the names of counterparties, adverse parties, directors, shareholders and beneficial owners where known;
- a short description of the matter and its jurisdiction;
- whether the prospect has already consulted another adviser on the same issue;
- whether the firm or any of its people have had prior dealings with any of the named parties;
- the expected timing and whether urgent steps are in contemplation.
None of this requires a detailed retainer discussion. It is simply the information needed to search. Where the prospect cannot provide full names, the firm should note that limitation and decide whether it can proceed to a meeting on a preliminary basis. A meeting held without a screen is a risk decision, not a neutral administrative step.
Searching, and recording the search
A conflict search is only as good as its record. The firm should search its client and matter management system, billing records, correspondence and any informal relationship notes. It should search not only the exact names given, but reasonable variations, former names and group entities. Where the firm has offices or affiliated entities, the search should extend to them.
The record should show the date and time of the search, who carried it out, the search terms used, the results returned, and the decision taken. If the decision was to proceed, the record should identify who approved that decision and on what basis. A note saying ‘no conflicts’ without more is unlikely to satisfy a regulator reviewing the file months later, and it will be of little help to the firm if a dispute arises.
When a Chinese wall is enough — and when it is not
A Chinese wall, or information barrier, can be an effective safeguard in some circumstances. It is most credible where the firm is acting for two clients on separate matters, where no confidential information material to the other matter is held, and where the clients have given informed consent. The barrier must be real: separate teams, restricted access to files and systems, written undertakings, and a named person responsible for maintaining the separation.
It is not a universal solution. A wall will not cure a conflict where the firm would be acting for opposing parties in the same matter, or where the confidential information held by one team is material to the other. Nor will it override a regulatory prohibition. The SRA Code of Conduct for solicitors is clear that a firm should not act where there is a conflict of interest or a significant risk of one, and that acting for two clients in the same matter is generally prohibited. The ICAEW Code of Ethics applies a similarly principles-based approach for accountancy firms, requiring conflicts to be identified, evaluated and managed rather than simply declared away.
In practice, the question is not ‘can we build a wall?’ but ‘would a reasonable observer, and a regulator, accept that the wall removes the risk?’ If the answer is uncertain, the safer course is usually to decline the instruction before it becomes a retainer.
What the regulators expect to see
The SRA and ICAEW do not require a single prescribed form. They require evidence of a system that works. In broad terms, that means the firm can show it identified the conflict, assessed the risk, took proportionate steps, obtained consent where needed, and kept a record. Outcomes-focused regulation does not mean no evidence; it means the evidence should demonstrate judgment, not just a tick-box.
For UK firms, the practical expectation is consistency. A conflict policy that exists but is not followed is worse than a simpler policy that is followed every time. The file should tell a coherent story: enquiry received, parties identified, search performed, result considered, decision made, and any safeguards documented.
A short enquiry-stage checklist
Before the first meeting, the firm should be able to answer five questions:
- Who are the parties, including group entities and known counterparties?
- What is the matter, and is it adversarial or transactional?
- Have we searched our records and recorded the search?
- If there is an adjacency, is it manageable — and who has approved that view?
- If we are not sure, what is our reason for proceeding anyway?
If the fifth answer is ‘because the prospect seems keen’, the firm has not yet made a risk decision. It has made a commercial one.
Slowing down the first ten minutes
The most effective conflict control is a slight delay. A short enquiry note, a proper search and a recorded decision take less time than unwinding an engagement later. They also improve the quality of the first meeting, because the firm arrives knowing who it is meeting and why. For UK advisory firms, that is not just good risk management. It is good client service.
