The United States District Court for the Southern District of New York took up a case last week involving a claim of legal malpractice involving a lawyer who recommended that his client invest its money in a particular project. The lawyer, who held himself out as an investment and financial legal expert, reportedly convinced his client to redirect its money into a particular investment project. Unfortunately, according to the client, the lawyer’s “glowing recommendation” and projections regarding the investment were “based upon nothing but lies and fiction,” and the lawyer had done “no meaningful analysis” of the project he had recommended. Rather, the client claims that it later learned that the lawyer’s recommendation was based solely upon the lawyer’s financial self-interest related to the same business project. Legal ethics that lawyers are required to follow place restrictions on lawyers advising clients on business interests where the lawyer himself has an interest. Such conflicts of interest by lawyers are a leading cause of legal malpractice. Nevertheless, it happens. Be wary of “lies and fiction!”
