Barnes & Thornburg (“BT”) recently avoided a legal malpractice lawsuit based on representing two clients simultaneously that were conflicted. In the case, a company called CRIT purchased a controlling interest in a nationwide staffing business, Peoplelink, from William Wilkinson. After the sale, Wilkinson remained with Peoplelink as its CEO until 2015, when he hired BT to represent him in connection with his departure. The agreement which Wilkinson and Peoplelink ultimately executed contained non-compete language.

After the sale, BT remained as Peoplelink’s outside counsel after Wilkinson left the company; but, continued to represent Wilkinson in other unrelated matters. As an incidental result of this continued representation of both parties, an attorney at BT accidently sent an email intended for Wilkinson to Peoplelink relating to Wilkinon’s purchase of another staffing company only 7 months after his departure – in violation of the restrictive covenants.

Peoplelink thereafter brought a legal malpractice lawsuit against BT and used violations of Rules 1.7 and 1.8 – which govern attorney’s representation of clients with conflicts of interest – to form the basis of their claim that BT breached their duty to Peoplelink. However, the Indiana Appellate Court held that violations of the rules alone could not establish a legal malpractice claim and that Peoplelink did not allege that the firm’s malpractice caused any actual damages. It also reasoned that Peoplelink's argument for disgorgement of legal fees as its basis for damages was not enough to maintain the claim.

CRIT v. Wilkinson, et. al, 2018 Ind. App. LEXIS 16 (Ind. Ct. App. 2018)

Alex Passo and the Patterson Law Firm, LLC handle legal malpractice lawsuits throughout Illinois and Indiana. If you have a matter that you would like to discuss with Alex, you can reach him at (312) 750-1820 or apasso@pattersonlawfirm.com.